Australia recorded a surprise trade surplus in November, the first seen since March 2014.
While it was driven by surging prices for Australia’s key commodity exports, crucially, volumes also increased, something that bodes well for Australian economic growth should it be repeated in December.
Tapas Strickland, an economist at the National Australia Bank, explains.
“The increase in trade volumes in November (LNG up 5%, coking coal up 12%, and iron ore up 1%) if repeated in December, should see the trade balance add to Q4 GDP growth,” he says.
“This should eliminate fears out there that Australia was at risk of recording a ‘technical recession’ after the weak Q3 GDP figures.”
Net exports detracted 0.2 percentage points from Australian GDP in the September quarter, contributing to the surprise
A technical recession is defined as two consecutive quarters of negative economic growth.
While there’s plenty of other data still to come in terms of Australia’s Q4 GDP report, there’s already signs that commodity export volumes remained strong last month with shipping data from Port Hedland — the world’s largest iron ore loading terminal — hitting a record high level of 43.94 million tonnes in December.