May 10, 2011 8:56 AM GMT+0530
By Jacob Greber and Michael Heath
Australia reported a trade surplus in March, rebounding from a deficit the previous month as increased exports of iron ore and coal outpaced higher imports of gasoline. The Australian dollar rose.
The excess was A$1.74 billion ($1.88 billion), from a revised A$87 million deficit in February, the Bureau of Statistics said in a report in Sydney today. The median estimate in a Bloomberg News survey of 19 economists was for a surplus of A$500 million.
Australia’s economy probably contracted last quarter as damage to mines from torrential rains in Queensland state cut coal production “significantly” and recovery was taking longer than expected, the central bank said May 6. Even so, the local currency broke through $1.10 last week to reach the highest level since it was freely floated in 1983, as traders bet a mining investment boom will spur interest-rate increases.
“Part of the bounce-back is due to coking coal exports, which are returning after the low in February due to the Queensland floods,” Andrew McManus, an analyst at Australia & New Zealand Banking Group Ltd. in Sydney, said before the report. “We would expect some weakness in services and manufacturing exports as has been the trend with the Australian dollar above parity with the U.S. currency.”
The Australian currency climbed to $1.0785 as of 1:20 p.m. in Sydney from $1.0766 just before the report.
Exports rose 9 percent to A$25 billion, led by a 15 percent gain in iron ore. Imports advanced 1 percent on a 23 percent increase in gasoline, the report showed.
Coal Industry
The Reserve Bank of Australia has held rates at 4.75 percent for the past five meetings to help Queensland’s economy recover from the damage. It boosted borrowing costs seven times from October 2009 to November last year to contain inflation as the mining boom bolstered employment growth.
“The return to more normal operating conditions will see net exports add to growth in the second quarter and points to strong second-quarter gross domestic product growth, in the order of 1.5 percent,” Westpac Banking Corp. said in a research note after the trade balance report.
Australian employers added 37,800 workers in March, more than economists forecast, led by hiring in the mineral- and energy-rich states of Western Australia and Queensland. The country reported its biggest annual job gain on record last year.
“Australia’s terms of trade are likely to rise further in the June quarter, to be above the level assumed a few months ago -- and at their highest level in at least 140 years -- boosted in particular by high prices for iron ore and coal,” the RBA said in its quarterly policy statement last week, referring to a measure of income earned from exports.
Natural Gas
Increased demand for skilled workers at projects such as Chevron Corp.’s A$43 billion Gorgon liquefied natural-gas project, under construction in Western Australia, threatens to stoke wage growth and inflation. BG Group Plc, Chevron, Royal Dutch Shell Plc and ConocoPhillips are among companies planning to invest about A$200 billion in proposed liquefied natural gas projects in Australia.
Prime Minister Julia Gillard said Feb. 1 the resource industry could be short of 36,000 workers in the next four years and the government will have to introduce measures to encourage older Australians and parents to rejoin the workforce to meet the demand. (By Bloomberg)
By Jacob Greber and Michael Heath
Australia reported a trade surplus in March, rebounding from a deficit the previous month as increased exports of iron ore and coal outpaced higher imports of gasoline. The Australian dollar rose.
The excess was A$1.74 billion ($1.88 billion), from a revised A$87 million deficit in February, the Bureau of Statistics said in a report in Sydney today. The median estimate in a Bloomberg News survey of 19 economists was for a surplus of A$500 million.
Australia’s economy probably contracted last quarter as damage to mines from torrential rains in Queensland state cut coal production “significantly” and recovery was taking longer than expected, the central bank said May 6. Even so, the local currency broke through $1.10 last week to reach the highest level since it was freely floated in 1983, as traders bet a mining investment boom will spur interest-rate increases.
“Part of the bounce-back is due to coking coal exports, which are returning after the low in February due to the Queensland floods,” Andrew McManus, an analyst at Australia & New Zealand Banking Group Ltd. in Sydney, said before the report. “We would expect some weakness in services and manufacturing exports as has been the trend with the Australian dollar above parity with the U.S. currency.”
The Australian currency climbed to $1.0785 as of 1:20 p.m. in Sydney from $1.0766 just before the report.
Exports rose 9 percent to A$25 billion, led by a 15 percent gain in iron ore. Imports advanced 1 percent on a 23 percent increase in gasoline, the report showed.
Coal Industry
The Reserve Bank of Australia has held rates at 4.75 percent for the past five meetings to help Queensland’s economy recover from the damage. It boosted borrowing costs seven times from October 2009 to November last year to contain inflation as the mining boom bolstered employment growth.
“The return to more normal operating conditions will see net exports add to growth in the second quarter and points to strong second-quarter gross domestic product growth, in the order of 1.5 percent,” Westpac Banking Corp. said in a research note after the trade balance report.
Australian employers added 37,800 workers in March, more than economists forecast, led by hiring in the mineral- and energy-rich states of Western Australia and Queensland. The country reported its biggest annual job gain on record last year.
“Australia’s terms of trade are likely to rise further in the June quarter, to be above the level assumed a few months ago -- and at their highest level in at least 140 years -- boosted in particular by high prices for iron ore and coal,” the RBA said in its quarterly policy statement last week, referring to a measure of income earned from exports.
Natural Gas
Increased demand for skilled workers at projects such as Chevron Corp.’s A$43 billion Gorgon liquefied natural-gas project, under construction in Western Australia, threatens to stoke wage growth and inflation. BG Group Plc, Chevron, Royal Dutch Shell Plc and ConocoPhillips are among companies planning to invest about A$200 billion in proposed liquefied natural gas projects in Australia.
Prime Minister Julia Gillard said Feb. 1 the resource industry could be short of 36,000 workers in the next four years and the government will have to introduce measures to encourage older Australians and parents to rejoin the workforce to meet the demand. (By Bloomberg)
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