Growth set to accelerate in June quarter

The economy appears to have got its mojo back after Wednesday's relatively sombre
national accounts, not least from a massive turnaround in the country's trade
position.
Fresh data released on Thursday also showed new vehicle sales were at a record for
the month of May.
Sharp increases in coal and iron ore prices saw exports surge 11 per cent in April,
helping the monthly trade balance swing from a $2 billion deficit in March to the
first surplus in 13 months.
"Strong growth in resources exports is further evidence that we are on the cusp of a
second-wave mining boom," Trade Minister Simon Crean told reporters in Canberra on
Thursday.
The trade balance of goods and services was a $134 million surplus in April compared
with a revised $2.04 billion trade deficit in March, Australian Bureau of Statistics
data showed.
The value of iron ore exports increased by 32 per cent in the month, even though the
volume of ore exported increased by only two per cent.
Commonwealth Bank of Australia senior economist Michael Workman expects a new export
record to be set by mid-2010 as the full effects of the April 1 price rises for the
benchmark bulk commodity contracts are phased in.
"The price rises of 80 per cent for iron ore, 35 per cent for thermal coal and 55
per cent for coking coal are significant for export receipts," he said.
Goods exports to China - Australia's largest trading partner - increased by 23 per
cent in April, while they increased by 17 per cent to Japan, which is ranked second.
Mr Crean says exports to China will remain strong in an economy that is expected to
grow 10 per cent this year.
The April export outcome was in sharp contrast to the disappointing result in the
national accounts for the March quarter, that showed exports subtracted 0.5
percentage points from gross domestic product (GDP).
"The trade position looks set to remain in the black for much of this year," RBC
Capital Markets senior economist Su-Long Ong said.
She said coupled with this week's stronger-than-expected retail sales reading for
April, it is pointing to a firm June quarter GDP after the 0.5 per cent increase in
the March quarter.
The economy's apparent new vigour also spilled into new vehicle sales for May.
Data released by the Federal Chamber of Automotive Industries (FCAI) showed that
89,218 passenger cars, SUVs and commercial vehicles were sold in May, up 18.3 per
cent on the same month in 2009.
"This is a record May result and shows the new vehicle market is maintaining a
strong sales momentum," FCAI chief executive Andrew McKellar said in a statement.
"All vehicle segments increased during the month, demonstrating a genuine recovery
in the marketplace."
The SUV segment increased by 28.9 per cent, followed by passenger cars rising by
19.4 per cent, light commercials up by 6.4 per cent and heavy commercials vehicles
up by 3.7 per cent.
"It is encouraging to note that private buyers have returned in larger numbers
during May - up 27.2 per cent - taking over some of the momentum that business
buyers have provided over the past year," Mr McKellar said.