It’s now almost situation normal for the Australian economy; the Reserve Bank is on rate watch positive, the economy is bumbling along with employment mixed to weaker, consumption subdued, but not depressed, house prices rising, consumer confidence exploding and export incomes now taking a small turn for the better.

The big slump in our terms of trade is now all but over, and from now on it will be the value of the Aussie dollar and market prices moves which drive much of the changes, and when recovery comes, a sustained upturn in volumes.

But the impact of the surge, especially in iron ore and coal prices, plus oil and gas for a short while (and then the fall in oil prices), plus the recession which slashed demand for imports (along with the drop in oil prices), was dramatic, possibly as dramatic as Australia has ever seen, according to preliminary trade figures for the 2009 year released today.

The Australian Bureau of Statistics reported that in the year to June “the balance of goods and services was a surplus of $5.8b. This is a turnaround of $29.4b on the 2007-08 deficit resulting from a $51.8b (22%) increase in exports offset by a $22.5b (9%) increase in imports of goods and services. Exports of non-rural and other goods were up $45.0b (29%) and rural goods were up $3.9b (15%) compared to 2007-08.”

The year saw a series of big trade surplus which continued as imports fell under the impact of the slump. But from April onwards export income fell as new, lower prices kicked in on commodity contracts in Asia, especially coal and iron ore. That saw trade deficits appear, but that trend seems to have eased, according to the June trade position from the ABS today.

And the Reserve Bank’s July Commodity Price Index suggests that the slump is over with a steadying in the index being reported after sharp falls for most of this year. That was after a big falls in May and June. The RBA said that in Australian dollar terms, “the index is estimated to have been broadly unchanged in July, following a decrease of 3.8 per cent (revised) in June.” The RBA pointed to higher prices for iron ore, aluminium and beef and veal; and revisions of previous big falls.

Now the Australian Bureau of Statistics has confirmed that the nasty falls may be behind up with a 2% rise in exports in June leading to a sharp, 40% drop in the trade deficit from May. “In seasonally adjusted terms, the balance on goods and services was a deficit of $441m in June 2009, a decrease of $296m (40%) on a revised deficit in May 2009, ” the ABS reported.

“Seasonally adjusted, imports rose $13m to $20,838m. Intermediate and other merchandise goods rose $247m (4%) with the fuels and lubricants component up $234m (13%). Consumption goods rose $207m (4%), capital goods rose $35m (1%) and services debits rose $27m (1%).