Tuesday, May 5, 2009

Australia March Trade Surplus Widens as Imports Fall

Australia’s trade surplus unexpectedly widened in March for a third month as imports fell and farm exports rose.

The trade surplus expanded to A$2.5 billion ($1.8 billion) from a revised A$1.75 billion in February, the Bureau of Statistics said in Sydney today. The median estimate of 19 economists surveyed by Bloomberg was for A$1.7 billion.

The widening trade surplus from the world’s biggest shipper of coal and iron ore may help Australia’s economy emerge from its first recession in two decades sooner than many other nations. Central Governor Glenn Stevens left the benchmark lending rate at a 49-year low of 3 percent yesterday and said record cuts to borrowing costs and government spending will help fuel a recovery.

“While exports out of Europe, Asia and the Americas have collapsed, Australia has held up remarkably,” Rob Henderson, chief markets economist at National Australia Bank Ltd. in Sydney, said ahead of today’s report.

Imports fell 3 percent to A$22.1 billion. Imports of capital goods, such as machinery, dropped 12 percent.

Exports were little changed at A$24.6 billion in March, today’s report showed. Agricultural shipments rose 10 percent, while coal fell 5 percent.

While the near-term outlook for the global economy “remains weak,” there are further signs of stabilization in several countries, Governor Stevens said yesterday.

“The Chinese economy in particular has picked up speed in recent months and many commodity prices have firmed a little,” he said.

China, Australia’s largest trading partner, shows “positive signs” of recovery, Vice Finance Minister Li Yong said on May 3. The government will continue policies to restore growth following the economy’s 6.1 percent expansion in the first quarter, Li said.

A recovery in demand for natural resources will boost Australia’s economy, which unexpectedly shrank 0.5 percent in the fourth quarter, the first contraction in eight years.

Miner BHP Billiton Ltd. is among companies that have fired workers and trimmed investment plans as overseas orders for natural resources fell.

BHP Billiton said in January it would shed 3,400 workers in Australia as it shuts a nickel mine, closes part of a refinery and reduces coking coal output by as much as 15 percent.

The jobless rate probably rose to a six-year high of 5.9 percent in April, according to the median estimate of 19 economists surveyed by Bloomberg News. The employment report will be released tomorrow.

Unemployment rose by the most in 18 years in March, climbing to 5.7 percent from 5.2 percent and adding to signs the nation is in its first recession since 1991.