Australia is enjoying a renewed nominal export boom driven by China. In 16/17, export values rebounded by ~19% y/y. This is the fastest growth since the terms of trade peaked at a record high in 2011 (Figure 2). This growth was led by exports to China surging ~25% y/y to a record high of $107bn (Figure 3). This is faster than exports excluding China, albeit they also grew by a still strong ~16% y/y.
The strength of global PMIs suggests momentum of export growth appears set to continue in the near-term (Figure 4), albeit the pace is likely peaking. That said, in the near-term, commodity prices – particularly Australia’s largest exports of iron ore and coal – rose again in recent months post 16/17 (i.e. June 30, Figure 5).
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
