Garry Shilson-Josling, AAP Economist
(Australian Associated Press)
The decline in Australia’s export commodity prices was interrupted in February.
Commodity prices rose by 1.2 per cent in foreign currency terms in the month, figures from the Reserve Bank of Australia show.
The increase in February was driven by gold and iron ore prices, although base metals and rural goods also rose in February, the RBA said.
Despite the small rise, which followed a 0.7 per cent drop in January, the RBA’s commodity price index was still down by 22 per cent from a year earlier and by 55 per cent from the peak in mid-2011.
Earlier on Tuesday, the Australian Bureau of Statistics released data showing the terms of trade, the ratio of export prices to import prices – a key indicator of trends in Australia’s national income, was 34 per cent lower in the final quarter of 2015 than its peak in the second quarter of 2011.
With export commodity prices in January and February down by four per cent on average from the final quarter of 2015, it looks as though that trend continued into the first quarter of 2016.
In its quarterly monetary policy statement in February, the RBA said labour productivity had picked up in recent years after a lull in the mid-2000s.
But the positive effect on national income had been largely offset by two factors – one was lower labour force participation and the other was the falling terms of trade.