Australia posts $1.71 billion trade surplus
Sydney (Australia) – Owing to rise in demand for Asian coal, iron ore and gold has enabled Australia to post trade surplus of $1.71 billion in December 2011, even despite concerns about a global economic slowdown. The figure beat analysts’ expectations for a $1.2 billion surplus.
This trade surplus of $1.71 billion in December 2011 was $366 million higher than the down-ward-ly revised surplus of $1.34 billion in November, with exports up 2 per cent and imports up 1 per cent on the month. Australia recorded its 10th consecutive trade surplus in December, capping a year in which dynamic Asian demand helped drive a record $313 billion in exports.
The annual export figure was 10 per cent higher than the 2010 total, with growth driven by minerals and rural goods. Trade Minister Craig Emerson said the data attested to the strength of the Australian economy and the importance of its engagement with Asia.
“Australia is well-positioned to reap the benefits of strong economic growth in economies as diverse as China, India, Indonesia and Malaysia,” Dr Emerson said. ”Through Prime Minister Gillard’s Asian Century White Paper project, the government is developing policies for even stronger integration of the Australian economy with those of the Asian region.”
Last year was the first calendar year in which exports topped $300 billion. The trade surplus of $19.2 billion was also the largest ever for a calendar year. Demand from fast-growing Asian economies drove the robust performance: total merchandise exports to North Asia rose 18 per cent for the year, with exports to China up 24 per cent.
Merchandise exports to ASEAN, meanwhile, climbed 23 per cent.
After 10 consecutive monthly trade surpluses, economists remain split over whether the strong Australian dollar and falling commodity prices will drag down future export growth.
CommSec economist Savanth Sebastian expects the trade boom to continue making Australians richer, boosting confidence levels and pushing consumers to start spending again.
But ANZ chief Australian economist Katie Dean warned the super strong trade surplus would not last and December’s data was boosted by China stockpiling ahead of the new year.
In recent weeks commodity prices have strengthened as worries about a hard
landing for the Chinese economy have receded, helping Australian exports to outpace imports by $1.7 billion – exceeding market expectations.
ANZ has however warned that Australia will be running a deficit again by late this year as softer commodity prices and a strong rise in imports offset a pick-up in resource export volumes.
“The exports are holding pretty steady amid the slowdown in Asia. The strong rise in exports in December was mainly driven by coal shipments,” said JP Morgan economist Ben Jarman.
“There was a concern about China’s economy slowing down pretty sharply and it would be shown in the Aussie trade numbers, but that hasn’t really happened So we’re getting that income out of Asia despite the moderation in growth,” Jarman stated.
“On the imports side, it is a little patchy and distorted by some things that are happening with automobiles because of some supply-chain issues in Asia.”
HSBC chief economist Paul Bloxham was upbeat, saying the recovery of coal exports after last year’s damaging Queensland floods was back in full swing, boosting export levels.
The trade data highlighted the multi-speed economy with overall commodity exports up almost 20 per cent in the past 12 months while services exports slowed.
Resources represented about 62 per cent of total exports in December, well above their long-term’s average.
Last year Japan, China, South Korea and India registered a collective trade surplus of more than $90 billion with Australia.