Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
Iron ore shipments to China struck another record high in April, helping to lift overall Australian exports to a historic peak of $36 billion.
The Australian Bureau of Statistics said preliminary figures show the nation’s trade surplus was $10.1 billion, the third highest goods surplus on record.
“Following strong exports in March 2021, metalliferous ores increased another one per cent in April 2021 to record a historic high of $16.5 billion, driving record high exports,” ABS head of international statistics, Andrew Tomadini said.
Despite ongoing frictions with China, exports to the Asian giant rose by a further four per cent.
Metalliferous ores to China reached $10.9 billion, driven by a further rise in iron ore shipments to $10.6 billion – both record highs for the second month in a row.
The increase in iron ore was driven by price, which increased four per cent in the month, offsetting a one per cent decline in quantity, the ABS said.
The iron ore price hit a peak of around $US230 per tonne earlier this month, but has since weakened to stand just below $US190 per tonne.
“Iron ore prices have fallen sharply in recent days as China clamps down on speculative behaviour in the steel industry, weighing on mill profitability,” Commonwealth Securities senior economist Ryan Felsman said.
In this month’s federal budget, Treasury said it expects the iron ore price could remain elevated for an extended period due to Chinese demand and unresolved supply disruptions in Brazil, another major iron ore exporter.
Overall, exports increased $12.6 million in April, but imports fell $1.9 billion, adding to the already strong surplus recorded in March.
Meanwhile, the ABS said payroll jobs eased 0.5 per cent in the fortnight to May 8, but were still 1.5 per cent above their pre-pandemic level.
However, they were down 1.5 per cent since March when the JobKeeper wage subsidy ended.
“The end of JobKeeper, seasonality in the labour market around Easter and short-term restrictions in some states may influence payroll job levels in the weeks between the end of March and May 8, 2021,” said Bjorn Jarvis, head of labour statistics at the ABS.
Even so, figures released last week showed the unemployment rate fell to 5.5 per cent in April, the sixth consecutive monthly decline.
In response, the weekly ANZ-Roy Morgan consumer confidence index – a pointer to future household spending – jumped 1.5 per cent to above its long-run average.
The confidence survey found respondents’ views on their current financial condition were particularly upbeat, rising 4.5 per cent, and with only 23 per cent voting they were “worse off” than this time last year, the lowest result since February 2020.
Views on future financial conditions were also up 3.3 per cent.
ANZ head of Australian economics David Plank warned that future confidence may be challenged by the emergence of new COVID-19 cases in Melbourne.
“However, we know the impact on sentiment is temporary if the outbreak is quickly brought under control,” he said.
Another potential negative for confidence and spending is the rising cost of transport on the household budget.
The Australian Automobile Association has found the average household spent $354 per week on transport in the first three months of this year, a $44 increase on the previous quarter.
This 14.3 per cent increase was the largest in at least five years.
“This sharp rise in transport costs needs to be monitored by governments, which need to avoid policies and decisions that impact cost of living,” AAA managing director Michael Bradley said.