Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Friday, 3 February 2017

Trade surplus biggest on record

Surplus shoots the lights out

Wow, not something you see every day!

As recently as October some were arguing that there could be no trade surplus for Australia - something or other to do with contract prices lagging spot prices.

Whatever, by December the trade surplus had hit stratospheric levels at more than $5.8 billion. 

There has never been a month even remotely like it for Australia. 

Even after the seasonal adjustment the $3.5 billion surplus was well over one billion dollars higher that anything we've ever seen before, across decades of data. 

The November surplus was also revised up massively to more than $2 billion.

Not surprisingly the boom was driven by coal and iron ore exports, although LNG export values are now also coming to the party, and will continue to contribute more through 2017. 

Annual exports to China topped $80 billion, and were up by 7 per cent from a year ago. 

This is very welcome news for Western Australia (iron ore), and Queensland (coal, LNG), while New South Wales coal exports also boosted the state's monthly merchandise trade balance. 

On the services side, the tourism boom rolls on.

The record trade result lit a bit of a fuse under the Aussie dollar, but is great news for Australia and its AAA-rating.

No repeat of the negative GDP print in Q3, you'd think.