Exports at record levels
Tremendous strength in Australian exports.
The international trade balance was another handy surplus of $827 million in May 2018, an increase from the revised $427 million reported for the preceding month of April.
Strength in coal prices sees aggregated export values for all types of coal threatening to usurp iron ore as Australia's most valuable commodity.
With LNG revenues also growing very strongly, May was the second highest month on record for total merchandise exports at $28.3 billion in original terms.
Services exports also eked out a record high in May, albeit only just.
Indeed, the total annual value of exports from Australia has surged to nearly $400 billion, having temporarily slumped below $320 billion in 2016 in the face of severe downward bulk commodity price pressures.
Aig's Performance of Services Index (PSI) exploded to a reading of 63 when it was reported this morning, indicating that Australia's massive services sector is expanding at the fastest pace ever.
On the one hand, the record high jobs vacancy figures reported last week validate this uber-bullish view of the services sector.
Hopefully this does prove to play out domestically; and it would be wonderful if true.
On the other hand, the survey does bounce around a bit, and it may well retrace over the coming months.
On the other hand, the survey does bounce around a bit, and it may well retrace over the coming months.
Internationally, services exports did hit their highest ever level in May, driven by pharmaceuticals and ongoing strength in tourism and education, but there's no real indication of a boom in these figures.
Aig's indices are designed to be leading indicators, though, so if they're right then it's brighter days ahead for the services economy, mainly benefiting the most populous capital cities.
