Trade surplus close to record in May

CANBERRA, AAP – Australia’s trade surplus grew to $9.68 billion in May, a shade smaller than the record $9.75 billion set in March 2020.

Australian Bureau of Statistics figures show the May result compares with a goods and services trade surplus of $8.15 billion in April.

Exports grew by three per cent in the months, and were only partially offset by a three per cent increase in imports.

The ABS also reported that job vacancies in the May quarter were 57 per cent higher than their pre-COVID-19 level.

Vacancies were 23 per cent higher than the February quarter.

“There were around 362,000 job vacancies in May 2021, which was higher than we have ever seen in Australia,” ABS head of labour statistics Bjorn Jarvis said.

However, he said businesses across all industries had reported difficulties in filling vacancies.

Australia’s manufacturing sector is also growing at its fastest pace in almost 30 years, despite the headwinds from COVID-19 outbreaks and associated lockdowns.

The Australian Industry Group performance of manufacturing index rose a further 1.4 points in June to 63.2, the highest monthly result since the index commenced in 1992.

“The 2020/21 financial year closed on a high note for Australia’s manufacturing sector,” Ai Group chief executive Innes Willox said.

A record pace of expansion was evident across the food and beverages, machinery and equipment, building materials and chemicals sectors.

“Exports of manufactured goods surged in June and new orders were also higher, pointing to the likelihood of further expansion in the months ahead,” Mr Willox said.

Separate figures shows the housing market posted strong price gains over the 2020/21 financial year.

Residential property prices rose 13.5 per cent over the year, the highest annual growth rate since 2004 when the market was unwinding from the housing boom of the early 2000s.

The CoreLogic home value index rose 1.9 per cent in June, with prices rising in all capital cities.

But CoreLogic head of research Eliza Owen said softer growth rates were emerging at the high end of the market, as well as in Perth and Darwin.

“The rest of the market tends to follow movements at the high end, and this is the first time in nine months that the high-tier growth rate has not accelerated,” Ms Owen said.

Australia’s financial regulators have been monitoring developments in the housing market in recent months.

The Reserve Bank of Australia has consistently said it is not its role to target house prices, only to ensure lending standards do not deteriorate.

A meeting of the Council of Financial Regulators last month agreed overall lending standards in Australia remained sound.

Figures released by the RBA on Wednesday showed housing credit is growing at its fastest pace since June 2017.

However, the growth was largely made up by owner-occupier loans, rather than what are considered riskier investor home loans.