Retail sales ... trade continued to grow during the Christmas season.
A sharp jump in foreign demand for cereal has helped to push Australia's trade balance into a surplus for the first time in two years.
The latest official figures came as retailers were given another boost, with trade data for December strengthen during the crucial Christmas shopping season.
Exports rose 4 per cent in December as imports lifted by 2 per cent to take the trade balance to $468 million, figures released by the Bureau of Statistics on Thursday showed. November's trade balance was revised from a deficit of $118 million to a surplus of $83 million.
Cereal exports, boosted by a bumper harvest in Western Australia, rose by $436 million or 78 per cent in December. Rural exports lifted by 17 per cent for the month, while non-rural exports edged 5 per cent higher.
Economists had said Australia's trade balance was on track to reach a surplus as resources exports ramp up and imports decline on a weakening currency.
The Australian dollar rose from US89.35¢ to US89.91¢ after figures were released.
Festive cheer for retailers
Meanwhile, the festive season brought cheer to retailers, with the sector continuing to recover in December, new statistics bureau data showed.
Retail trade expanded by 0.5 per cent in November, matching economists' expectations, after a rise of 0.7 per cent in November.
The retail sector has been improving over the past few months, after a fairly subdued 2013.
"Earlier monetary stimulus is clearly doing its job," Moody's Analytics associate economist Katrina Ell said.
"Low rates and rising house prices are encouraging consumers to spend more, while the lower Aussie is bringing back some spending from offshore."
Business confidence continues to rise
At the same time, business confidence in the three months to December soared their highest level in almost three years, as conditions improved but remain soft, a National Australia Bank survey published on Thursday showed.
While conditions remained weak, business investment expectations "rose unexpectedly" for the fourth quarter to around their long-run average, NAB said.
The post-election lift in sentiment among firms continued into the end of the last year, with the improving housing sector, higher equity prices, a weaker exchange rate and a low interest rate environment contributing to the sustained confidence boost, NAB said.
Business confidence rose to 8 points in the fourth-quarter of last year, from 5 points in the third-quarter and minus 1 in the second-quarter.
Business conditions rose to minus 3 points in the three months to December from minus 7 in the previous quarter.
More to come