Bonanza surplus in Q1
In the last quarter of 2015 Australia racked up a horrible trade deficit of an unprecedented $11.5 billion.
Yet what a difference a year-and-a bit can make!
For the month of March 2017 a fifth consecutive monthly trade surplus of $3.1 billion was reported, with the February result revised up to $3.7 billion.
Over the three months to March there was a bonanza trade surplus of $8.96 billion, up by a thunderous 48 per cent from the $6.08 billion surplus in the preceding quarter.
Over the past five months the cumulative surplus has ripped to an unheard of $16 billion, while the trade balance has also moved into a rolling annual surplus for the first time in half a decade.
The March quarter national accounts will therefore record thumping growth in nominal GDP.
But since the increase was all driven by prices (and not volumes) net exports will be a drag on real GDP in the quarter.
The increase in the value of iron ore and coal exports over the past year - never mind the past dozen years - has been extraordinary, and thus probably not sustainable.
LNG exports are starting to contribute nicely, while there was a timely $443 million or 32 per cent bounce in gold export values in March too.
Meanwhile the trade services balance has clawed all the way back to where it was in 2007, with the lower dollar gradually helping to rebalance the equation.
Meanwhile the domestic tourism economy is fairly humming along.
Record export values in FY2017?
Imports increased by 5 per cent in the month, with a chunk of imports having been pulled forward from the previous month into January to coincide with Lunar New Year.
Exports increased by 2 per cent in March and appear to be on track for a record high in financial year 2017.
However, Cyclone Debbie led to a number of coal miners in Queensland declaring a "force majeure" in April, so there will be a pothole in next month's figures.
That's a shame for Queensland, as LNG exports from the port of Gladstone have helped to restore the trade balance nicely following a multi-year slump.
The wrap
An absolute bonanza trade surplus has been notched up for the first quarter - the highest we've ever seen in Australia and by some margin - with annual exports to China and India both lifting nicely to multi-year highs.
There is now a real possibility that Australia's current account could be in surplus in the first quarter, which would be the first time this has happened in more than 40 years.
Real GDP growth in the March quarter will be weak, however, since the increase has been driven by surging iron ore and coal prices rather than export volumes.
And GDP growth could be knocked again in the second quarter due to the cyclone and flooding.
Looking through the noise, however, these are really positive numbers.
The Treasurer just needs to hope that China winding its stimulus back doesn't hurt our key commodity prices too much more.
