Mining exports still helping Australia dodge the gloom
Source : Smh.com
Published on : October 23, 2010
THE mining export bonanza has given the economy another kick along in the latest quarter, helping Australia to dodge the gloom enveloping other parts of the developed world.
Export prices surged 27.7 per cent in the year to September, Bureau of Statistics figures showed yesterday, after stronger-than-expected rises in the cost of coal and iron ore.
During the quarter, export prices rose 7.8 per cent, after a record surge of more than 16 per cent in the previous quarter.
Australia's bumper trade performance - driven by China's voracious demand for minerals and energy - is a key reason the country's employment performance has been much stronger than that of other rich countries. The boom in export prices has boosted national income, because it means the economy can afford a greater quantity of imports with the same level of exports.
Highlighting this jump in purchasing power, import prices fell 1.5 per cent over the year, helped by the steady rise in the dollar.
The rapid expansion economic activity has meant a sharp increase in demand for skilled labour, which is already in short supply in the mining boom states of Western Australia and Queensland.
The unemployment rate, at 5.1 per cent, is expected to fall further in the year ahead as the mining boom gathers momentum.
''This is yet more evidence that the surge to national income from higher commodity prices continues to flow into the economy,'' said JP Morgan's Ben Jarman.
''That's going to have very important consequences for earnings in the mining sector and also the budget balance.''
Despite jitters about slowing demand in China, the bureau said metal ore prices were up 14.6 per cent and coal prices 17.4 per cent.
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