Coal exports help fire up economy
PROSPECTS for improved economic growth across Australia have been boosted by a recovery in coal exports, official figures show.
Australia’s trade balance rose to a surplus of $ 2.47 billion in May, from a revised $ 90 million surplus in April when supplies of the country’s second largest export earner slumped in the wake of Cyclone Debbie.
Economists were only expecting the surplus to recover to $ 1.1 billion in May.
The value of exports climbed by $ 2.58 billion, or 9 per cent, during the month, with the value of coal exports surging 62 per cent. Mineral oil exports, led by liquefied natural gas, also contributed, rising 39 per cent.
The price of imports rose by $ 205 million, or 1 per cent.
Citi analyst Josh Williamson said the recovery in coal exports from Queensland reversed the impact of the tropical storm in late March and early April.
“The stellar surge in coal exports reflected the catch- up in shipments after the disruptions to railways and logistics caused by Cyclone Debbie,” Mr Williamson said.
“More so than we had anticipated, coal mines restarted operations quickly, with stockpiles being released as the railway network resumed operation.”
He said he expected coal exports to remain strong in the near term as miners boost shipments to make up for lost tonnage, and prices remain elevated.
As a result, net exports could still contribute to gross domestic product growth in the three months to June, economists said.
“Owing to April’s disruptions, it’s now going to be touch and go whether net exports drag on GDP growth in the June quarter, but net exports are on track to return to growth in the September quarter,” National Australia Bank economics director David de Garis said.
Exports fell 1.6 per cent in the three months to March, dragging economic growth to an anaemic 0.3 per cent in the quarter.
TD Securities strategist Annette Beacher said she expected GDP growth of 0.8 per cent in the June quarter, based on consumer and trade data released so far.