Trade surplus hits record $16 billion

Paul Osborne | July 7, 2022

A surge in coal and natural gas exports has sent Australia’s trade surplus skyrocketing to a record $16 billion in May.

The surplus was an increase of $2.7 billion on the April figure and well above market expectations of about $10.5 billion.

Exports rose $5 billion, or 9.5 per cent, to $58.4 billion, driven by rises in shipments of coal, coke and briquettes and other mineral fuels, the Australian Bureau of Statistics reported on Thursday.

Imports rose $2.3 billion, or 5.8 per cent, to $42.4 billion, led by imported fuels and lubricants, and non-industrial transport equipment.

NAB economist Taylor Nugent said while large increases for coal and liquefied natural gas were expected, much of the surprise came on the back of an upward revision to the April balance.

The figures also showed a recovery in travel exports, but tourist levels remain below pre-pandemic figures.

“So far, the increase in the value of tourism-related exports (inbound travel) has outpaced the lift in tourism-related imports (outbound travel),” he said.

Capital Economics’ Marcel Thieliant said net exports could add as much as two percentage points to Australia’s growth figures, which would be one of the biggest contributions ever recorded.

“While the reopening of the border seems to have provided a bigger boost to services exports than to imports so far, that should change as more Australians make holidays overseas,” he said.

Australia’s annual exports to China rose by 7.4 per cent to $172.9 billion, while imports from China also rose, by 13.2 per cent to a record $99.3 billion in the year to May.

In other data, payroll jobs rose 0.1 per cent in the month to June 11.

ABS head of labour statistics Bjorn Jarvis said growth this year was slower than in 2021 apart from a short-term rise in public administration jobs around the time of the federal election.

“The slower growth in payroll jobs over the month to mid-June continues to reflect the ongoing impacts of COVID-related disruption and short-term employee absences, particularly for people without paid leave entitlements,” he said.

The largest growth in payroll jobs came in the Northern Territory (up 0.6 per cent) and Queensland (up 0.4 per cent), which were largely seasonal positions.

The biggest rises were in the arts and recreation services (up 1.4 per cent) and public administration and safety industries (up 1.1 per cent).

Overall, payroll jobs were 6.8 per cent higher at June 11 than at the start of the pandemic and were up on pre-pandemic levels in 14 of 19 industries.

Meanwhile, new job advertisements declined for the first time since December but remained well above pre-pandemic levels.

The monthly SEEK new job ads indicator fell 2.1 per cent in June following five consecutive monthly gains.

Overall, job ads are 71.9 per cent above pre-pandemic levels, although they have stabilised in the hospitality and tourism sector.

The largest decline was in the NT (down five per cent), followed by South Australia, WA and Tasmania (down four per cent).

The largest falls outside the self-employed category were in science and technology (down 11 per cent), and advertising and media (down 10 per cent).

It is likely there will be a further fall in the unemployment rate, which sat at 3.9 per cent in April, when labour force data is released next week.