Export Monitor, a survey of export developments by Export Finance and Insurance Corporation (EFIC) examines the dynamics behind Australia’s trade surplus, which reached $1.4b in January, its highest level in nearly 2½ years.
EFIC’s senior economist Cassandra Winzenried observes that export values have surged, driven by increases in rural and resource export volumes. This growth has happened despite steep declines in commodity prices to multi-year lows over the past month that have been driven by slowing growth and signs of financial stress in China.
According to Winzenried, the trade balance is likely to continue in surplus as the Australian resource boom moves from the investment to the export phase.
Meanwhile, several sentiment surveys released this month suggest that exporter sentiment is improving despite the still strong Australian dollar, the uncertainties about China, and the sluggish world economy.
Winzenried comments that the EFIC Exporter Sentiment research finds SMEs sharing this optimism with 94 per cent of SME exporters expecting export sales to increase or remain the same over the next 12 months. Australia’s International Business Survey also contains some good news.
Seventy four per cent of respondents have plans to expand into two or more markets over the next two years, and almost three quarters of respondents say their international operations are as profitable as their local ones, or more profitable.