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Australia’s posted its second-highest nominal trade surplus on record for February supported by commodity prices.

The country’s seasonally adjusted trade surplus was A$3.57bn ($2.71bn) for the second month of the year, well above economists’ estimates of A$1.9bn and bringing it close to December’s record of A$3.7bn (previously A$3.51). The February figure shows a rebound from January’s A$1.5bn (previously $1.3bn) surplus.

Andrew Hanlan at Westpac said imports were the “major swing factor” over the past two months. Imports jumped 3.7 per cent, or A$1.1bn, in January, chewing into the surplus for that month, but then retreated 5.3 per cent, or A$1.6bn, and leaving imports down 1.8 per cent over the two-month period.

Mr Hanlan pointed out:

Keep in mind that the exchange rate appreciated over the two month period, +2.9% on a TWI basis and +4.1% against the US dollar, thereby placing downward pressure on prices of both imports and exports.

Paul Dales, chief Australia and New Zealand economist for Capital Economics warns the trade surplus may have peaked as commodity prices have edged lower.

He said:

Looking ahead, with export prices having dropped back a bit, price effects are unlikely to support the trade surplus as much in the coming months. And with Cyclone Debbie resulting in the closure of many coal mines in Queensland, the volume of coal exports will fall in April. As such, the trade surplus may have peaked.

He predicts net trade may have subtracted 0.4 percentage points from real gross domestic product growth in the first quarter and expects a 0.5 per cent quarter on quarter rise in GDP for the first three months of the year.

The Australian dollar was trading flat at $0.7608, however the data saw the currency swing from a loss of as much as 0.2 per cent to a gain of 0.1 per cent.

Copyright The Financial Times Limited 2017. All rights reserved.
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