BRW has an interesting story today quoting ANZ chief economist Saul Eslake claiming that Australia has just produced “the worst export performance for more than 50 years.”

How so? Well, Eslake has calculated the average annual growth in exports in four year blocks and says the 0.64% annualised growth over the past four years is worse than anything since the early 1950s. By way of comparison, the previous four periods after the Asian economic crisis saw annual growth in exports of 6%.

However, these statistics are only dealing in export quantities and our economic growth has been saved by the best terms of trade in 30 years as Chinese demand for our commodities lifted the value of exports to record highs.

But what happens when the current housing bubble and commodities boom comes to an end? We’ll still have a $58 billion current account deficit and we won’t have the ever-increasing coal and iron ore export revenue to save us.

It was noted last year that Australia had fallen below 1% of world exports for the first time, so what seems to be the problem?

Clearly, our manufacturers are shrinking in the face of all this competition from China. Barely a week goes by without some sort of major plant closure announcement from the likes of Holden, Kodak or even Kemalex Plastics.

However, our pathetic overall performance in high growth sectors such as shipping, pharmaceuticals and IT infrastructure will continue to count against us.

Sure, new iron-ore mines and record exports from the dodgy AWB are always to be welcomed (save for the small matter of giving Saddam’s regime $300 million) but export growth is the lifeblood of economic prosperity and we seem to have a major problem on our hands. Simply selling more poker machines to Japan is not the answer.