Western Australian merchandise exports were up 11.7 per cent for the September quarter, after five quarters of decline, while the national current account deficit fell 12 per cent to $18.1 billion.
Western Australian merchandise exports were up 11.7 per cent for the September quarter, after five quarters of decline, while the national current account deficit fell 12 per cent to $18.1 billion.
In seasonally adjusted terms, WA exports were $26.4 billion in the three-month period, making up about 41 per cent of national exports.
At that level, the state is still the nation’s largest exporter, although it has come back from a near 50 per cent market share last year.
National exports were driven upwards by WA’s performance, reaching just more than $64 billion, an increase of 6.5 per cent.
St George Bank senior economist Janu Chan said the lower Australian dollar was a major contributing factor in the improvement.
“The improvement was entirely due to a smaller goods and services deficit as export values rebounded in the quarter,” she said.
“Export volumes rose 4.6 per cent in the quarter, rebounding from a 3.3 per cent decline in the June quarter.
“Increased production capacity from mining investment is continuing to drive export growth.”
The lower exchange rate additionally reduced imports, Ms Chan said, which were down 2.4 per cent.
“This result means that net exports are expected to contribute a chunky 1.5 percentage points to GDP growth in the September quarter,” she said.
“The range of data over the past few days leaves us comfortable with our GDP forecast of 0.9 per cent in the September quarter and 2.5 per cent in the year.”
It follows reports that the federal Treasury would be downgrading growth predictions in the upcoming mid-year economic and fiscal outlook.
At a conference in Sydney in November, Treasury deputy secretary Nigel Ray said Australia had done well to avoid a recession, although the medium-term outlook was soft.
“We are now four years on from the peak in the terms of trade, and while the ramp-up in mining export volumes is supporting output growth, other sources of domestic demand are not entirely filling the hole left by the steep falls in mining investment,” Mr Ray said.
“This means Australia is now in a prolonged period of below-par growth, the likes of which we have rarely seen outside of a recession.”
Financial flows
Foreign debt continued to grow, rising by $25 billion to reach almost $1 trillion at the end of the September quarter.
That represents a more than doubling in the past 10 years, with Australian companies tapping foreign debt markets to finance projects.
One unique trend of recent years, however, is that Australians have had more equity holdings outside the country than other nations do here.
That started in December 2013, and has continued in every quarter since, with Australians equity investments overseas exceeding foreign investments into Australia by $71 billion.
