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[SYDNEY] Australia's trade surplus shrank unexpectedly in January as bad weather hit resource exports and imports rebounded strongly, though the quarterly current account might still edge into the black for the first time since the mid-1970s.
Thursday's data from the Australian Bureau of Statistics showed a trade surplus of A$1.3 billion (S$1.41 billion) in January, well short of forecasts of A$3.8 billion.
There had been hopes the surplus would surpass December's historic high of A$3.3 billion as prices for major commodity exports remained strong in the month.
Dragging most on exports was a sharp pullback in non-monetary gold, a highly volatile trade that bounces around wildly from month to month.
Shipments of iron ore and coal also fell sharply partly due to bad weather and partly to the timing of the Chinese Lunar New Year.
Exports to the Asian giant dropped 24 per cent in January from December to A$7.7 billion, yet that was still up 55 per cent on January last year.
Beijing's efforts to slash inefficient steel making has been helping underpin prices for iron ore, Australia's single biggest export earner.
The Reserve Bank of Australia's index of commodity prices, which mirrors the country's resource mix, rose in both January and February to leave it up 56 percent on the year.
That suggests Australia might just enjoy its first current account surplus since 1975, a huge turnaround from 2015 when the deficit topped 5 per cent of gross domestic product.
"We are likely to continue to see decent trade surpluses for the time being with commodity prices still around 45 per cent above their most recent lows in late 2015," said Kristina Clifton, an economist at CBA.
"And there is a further lift in export volumes to come when the LNG plants reach peak output in 2018."
On the other side of the ledger, imports surprised by rebounding 4 per cent in January, mainly on the back of an unusually large rise in consumer goods.
Household electrical items alone climbed 29 per cent in the month, possibly pointing to a pick up in retail demand.
Figures out on Wednesday showed the country had again dodged recession as the economy expanded by 1.1 per cent last quarter, recovering strongly from a dip the quarter before.
Indicators suggest that momentum was maintained into the new year with business surveys in particular showing the best conditions in a decade.
A separate release out on Thursday showed approvals to build new homes beat expectations with a rise of 1.8 per cent in January, pointing to a still healthy pipeline of construction for the year ahead especially in high rise apartments.