Westpac’s excellent monthly publication “The Shipping News” looks at shipping as an important lead indicator of economic activity.
In this month’s edition, Westpac’s head of research Rob Rennie highlights the positive economic story for Australia as bulk commodity imports into China remain strong.
Recent weakness in bulk commodity prices in Asia arguably left the market expecting a softer update in Chinese imports today. This was clearly not the case – indeed we saw further signs of robust bulk imports and activity in the region which came in well above our expectations. On top of this, East-West trade is showing signs of improvement too.
That’s good news for Australian GDP because even though prices are down, volumes are up – which means no material fall in national income. Indeed, some commentators believe nation income will rise as China’s appetite remains unsated.
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