A huge rebound in Australia’s commodity exports has delivered a bumper trade surplus of $3.51 billion in December, and is likely to keep doing so for at least the next six months.
The figures are good news for the Federal Government with exports now likely to make a solid contribution to economic growth and dispel fears of a "technical" recession caused by a second successive quarter of shrinking GDP. The Bureau of Statistics figures showed that the value of exports jumped by a solid 5 per cent to $32.6 billion, while imports edged up 1 per cent. The trade balance measures the value of a nation’s exports over the price of its imports, and is considered a demonstration of a its international buying power and wealth.
The impact of the commodities boom can be seen in the extraordinary momentum shift in trade over the second half of the year. The last three months of the year delivered a surplus of $4.8 billion, a turnaround of $8.6 billion on the $3.8 billion deficit in the three months to August. The value of top quality iron ore fines exports jumped by 27 per cent, or $1 billion, in December alone. Coking coal shipments surged by 46 per cent, or $798 million, while gold also shone with exports surging 23 per cent to $1.7 billion. Rural exports did their bit, up 3 per cent, helped by record prices wool prices. Wool exports jumped by 12 per cent to just over $4 billion, while cereal exports increased by 5 per cent.
Continued export strength depends on Chinese demand, and Australia is now in the position to produce the quantities of iron ore and coal that China requires.
The Australian dollar jumped to a three-month high when the data was released, fetching close to 77 US cents.