Nation’s trade surplus hits a 13-month high

AUSTRALIA’S trade surplus blew past expectations in June as exports to China boomed to their second-highest level on record.

A report yesterday from the Australian Bureau of Statistics (ABS) showed Australia’s trade surplus swelled by 158 per cent to $1.87 billion – double the market forecast and the largest since May last year.

Exports climbed 2.6 per cent on a pick-up in a broad range of goods from iron ore and gold to farm and manufactured items. Imports fell 0.7 per cent as a pullback in petrol outweighed strength in transport and telecoms equipment.

The windfall owed much to China, which has been hoovering up Australia’s iron ore and coal output even as trade tensions with the United States have escalated.

Analysts noted that many of Australia’s exports to China were primary products used in the Asian nation’s domestic economy. There has also been no sign of a slowdown in the rapid growth of Chinese tourism or the flow of students from the country.

Indeed, exports of goods to China were the second strongest on record in June at $10.34 billion, an increase of almost 40 per cent from the same month last year.

“US President Donald Trump would have few concerns with the US-Australia trade imbalance – it is in the US favour by $18 billion over 2017/18,” noted CommSec chief economist Craig James.

“By contrast, Australia’s trade surplus with China stands at almost $38 billion.”

Liquefied natural gas sales to China and Japan have been a major growth area, with export earnings up 14 per cent in June at just over $4 billion.