Surplus rips to record high
A few weeks ago I posed the conundrum of whether the hoarding of loo roll and foodstuffs could see Q1 growth sneak over the line to come in at roughly zero, followed by, say, a -10 per cent decline in in Q2, before a return to growth in Q3.
In other words, could Australia yet again dodge a technical recession by the slimmest of margins?
As expected retail trade took the biggest leap on record in March, with turnover soaring +8.5 per cent higher as households stocked up in order to hunker down.
And today we saw the March 2020 trade surplus explode by an unprecedented +6.7 billion or +174 per cent to a record high of +$10.6 billion.
To say we've seen nothing like this before would be something of an understatement - all previous records were absolutely murdered.
As expected imports slumped by -4 per cent, but exports ripped +15 per cent higher to $42.4 billion, driven by a lazy $9 billion of iron ore exports, and a massive +225 per cent increase in the Aussie dollar value of gold exports.
Non-monetary gold exports soared by +$2.5 billion to $3.6 billion.
It's reasonable to expect that the value of LNG exports will be eroded next quarter as the commodity price falls with a lag, but for the month of March export values were extremely strong.
As might have been expected tourism credit took a horrendous -35 per cent hit as Australia's borders were closed off to international visitors.
It's worth remembering, though, that Australia normally has about 11.6 million resident departures in a year, so we can potentially offset much of the blow by holidaying and spending more at home through 2020.
Indeed the trade surplus from tourism services hit a record high in March.
Overall, it's feasible that net exports could add +0.5 percentage points to GDP in the first quarter, keeping the dream run of unbroken growth alive, even if just a few weeks longer.
The Aussie National Accounts for Q1 are scheduled to be released on June 3.