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Good news on the trade front -

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Reporter: Stephen Long

ELEANOR HALL: Well now for a change to some good economic news. Australia has achieved a trade
surplus of more than $2-billion. And the slump in exports that had dogged the economy appears to
have stopped, at least for now.

Joining me with the details is economics correspondent Stephen Long. So Stephen, take us through
these trade numbers.

STEPHEN LONG: Well they are surprisingly positive Eleanor. The market economists, most of whom once
again got it wrong, you might as well rely on a fortune teller, were tipping, the medium forecast
was for an increase in the surplus of about $700-million after seasonal adjustment - slicing and
dicing for the seasonal factors.

And instead we got $2.1-billion surplus in February. Now if that was all driven just by a collapse
in consumption then we might have a problem Houston, but instead we have seen some tentative signs
of a turnaround in exports.

Exports had fallen 10 per cent since the peak and they have been falling since November but this
month they rose by a small amount mainly because of rural goods from the farm. Very, very small
increase in mineral exports but any increase in exports given what we are seeing out there is good

ELEANOR HALL: How much of this $2-billion surplus though, is driven by a collapse in imports as
consumption wanes?

STEPHEN LONG: Well, there is some weird one-offs in these numbers that do give you pause for
caution apart from the import/export balance because there was one big gold transaction.

Someone, I don't know who, imported nearly $800-million worth of gold and then exported it again at
a profit and that has kind of skewed the numbers a little bit.

But even adjusting for that, yes we have seen a big fall in imports. A fall seasonally adjusted in
consumption goods of about 13 per cent and a third or more of that is cars so clearly people are
cutting back on discretionary spending on those big, big-ticket items which is a sign of the
economic circumstances we are in.

But, it is very, very positive that we have seen also an increase in capital goods coming into the
country which might suggest that we are actually gearing up for some production. Again, let's just
put a few words of caution around this though. This is one month's numbers and you would have to
drill down more than I could do in the available time on the statistics that we have at hand to
explain this.

But that is a good sign and also the fact that we are exporting goods, both farm goods and a small
increase in mineral exports.

ELEANOR HALL: So given, what is going on in the world economy, what is behind the improvement in
exports, particularly mineral exports?

STEPHEN LONG: Well, to be honest I am at a loss to say. It seems very counterintuitive. One might
suppose that it could suggest, could suggest possibly, that some of the stimulus packages overseas
are having some effect but I am cautious about that.

It seems puzzling that we are seeing this. We will have to see whether the figures are revised but
taking them on face value, at least we have got something to smile about Eleanor.

ELEANOR HALL: Stephen Long, our economics correspondent, thank you.