In the three months to June:
. Record $74 billion export income
. Largest trade surplus since 1970s
. Decade-low current account deficit
. Spending at cafés & restaurants up 8.5%
. Talk of "MasterChef effect"
. Building approvals up 2.3%
. House prices up 0.4%
RP Data, ABS 5302.0, ABS 8501.0, ABS 8731.0
A record surge of mining revenue has all but eliminated Australia's current account deficit, long regarded as our biggest economic problem.
As high as $16 billion in the March quarter, Australia's current account deficit shrank to $5.6 billion in the June quarter, or just 1.7 per cent of GDP, the third lowest result in 30 years and the lowest in about ten.
A measure of the amount of money leaving the nation each quarter over and above that coming in, it climbed as high as 6 per cent of GDP in the the 1980's prompting the then Treasurer Paul Keating to observe that "the world doesn't owe us a living" and that unless we made changes we would become a "banana republic".
Australia's trade balance has moved from "negative" where spending on imports exceeded income from exports to strongly positive, with a record high $74 billion in export income exceeding imports by $6.5 billion, the widest margin since the 1970s.
Export prices jumped 14 per cent with metal ore and mineral prices up 39 per cent and coal prices up 25 per cent. Export volumes surged 12 per cent...
"This is a much bigger rise in volumes than what we saw during the 2006-08 commodity price boom," said ANZ economist Katie Dean. "Rural exports are also climbing with wheat prices hitting record highs."
Separately released retail figures show consumers further opening their wallets in July, cautiously in most cases with overall spending up a fraction of a per cent, but dramatically at restaurants and cafés where the figures show spending climbing 8.5 per cent.
"It could be a Masterchef effect", said Deutsche Bank economist Adam Boyton. "The jump clear across all states. It is consistent with reports from late July that restaurants had benefited from a surge in interest stemming from the TV program. Media reports suggest that the final of this show drew just under four million viewers, making it Australia’s single most popular non-sport show since ratings began."
"While it is very difficult to isolate the true effect of the show, a positive influence on 'restaurant-quality' dining makes some sense."
Acting Treasurer Wayne Swan said the news showed "despite increased global uncertainty, Australia's economy is strong and continues to benefit from the sound management that saw us fight off recession."
Asked at a Sydney seminar whether a second "double dip" global recession was possible Reserve Bank Assistant Governor Guy Debelle said, "I think it's a risk," adding it was
"a somewhat unquantifiable risk."
Other news released yesterday showed building approvals up for the first time in four months, climbing 2.3 per cnet in July and RP Data measure of house prices relatively flat, increasing by just 0.4 per cent.
Economic growth figures to be released today are expected to show the economy growing strongly by around 1 per cent in the June quarter after analysts lifted their forecasts in response to the trade figures.
Published in today's SMH and Age
Reference: "It's Raining Men" by Paul Jabara and Paul Shaffer, 1979
5302.0 8501.0 8731.0 RPDATA