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Export resilience key to economy

Export resilience key to economy article image
Yesterday's smaller trade deficit figures, and Reserve Bank governor Glenn Stevens' comments about the resilience of the export sector, has increased the focus on export as a means to economic recovery. "Economic conditions in Australia have been stronger than expected a few months ago, with both consumer spending and exports notable for their resilience," said Stevens on Tuesday, after announcing that the RBA would keep the cash rate at three percent. "We think these trade numbers, while they're deficits, are showing very strong resilience in the Australian economy at the moment," echoed NAB Capital chief economist Rob Henderson. While lower terms of trade and weak investment figures posed a challenge, he supported the theory that the Australian economy would survive if commodity export volumes remained strong, even with weaker bulk commodity prices. "If companies keep producing the same amount of volume, they need the same amount of staff, the same amount of maintenance and so on. That tends to underpin activity in our economy," said Henderson.

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