By James Glynn and Rhiannon Hoyle
SYDNEY--Australia posted its first monthly trade surplus since early 2014 in November, as rising global commodity prices helped power exports, pointing to a possible quick rebound in the economy after its third-quarter contraction.
Fueling the improved trade performance was a surge in coal and iron-ore prices last year that has helped global commodity exporters.
The seasonally adjusted surplus of A$1.24 billion ($911 million) in November surprised economists who had forecast a deficit of A$550 million. The figures released by the Australian Bureau of Statistics on Friday showed an 8% surge in exports from the previous month, compared with a deficit of A$1.12 billion in October.
While the recovery in the trade accounts brightens the prospects for growth in the fourth quarter after the resource-rich economy contracted sharply in the July-September period, a lack of movement in the Australian dollar suggests investors may be taking a circumspect view on how one month's trade performance may help the economy.
If Australia did suffer an economic contraction in the fourth quarter, it would be the country's first recession in 25 years.
Some economists argue that while export prices have improved, there needs to be a jump in the volume of exports to give gross domestic product a boost. The huge swing in the trade balance from a deficit to a surplus was impressive, said Paul Dales, chief economist at Capital Economics. But he added that export volumes probably still fell in the last three months of 2016.
"That means net exports were probably a large drag on real GDP in the fourth quarter, albeit, by less than previously feared," he added.
Currency traders said the muted response in the currency may stem from a strong rally in the Aussie in recent days. They said the data also coincided with renewed strength in the U.S. dollar across Asia.
The trade gap had been narrowing in recent months in line with sharp gains in the prices of coal and iron-ore exports. The value of coal exports was up 26% in November from the previous month, while that of metal ores rose by 11%.
Prices for coal and iron ore increased sharply last year, while many other commodities also rose.
Australia counts coal and iron ore among its top exports and controls much of the world's trade in those commodities.
The price of coal surged last year as China reined in its own production. At the end of November, Australian shipments of steelmaking coal were worth almost four times what they were at the start of 2016.
Write to James Glynn at firstname.lastname@example.org and Rhiannon Hoyle at email@example.com
(END) Dow Jones Newswires
January 05, 2017 22:35 ET (03:35 GMT)
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