Australia's trade deficit narrowed in May, but April's record trade deficit has been revised to be even wider at more than $4.1 billion.

Bureau of Statistics figures show that Australia imported $2.75 billion more in goods and services than it exported in May, seasonally adjusted.

That is an improvement on April's deficit, the worst on record, which was originally reported as $3.9 billion, but has now been revised to an even larger $4.14 billion.

The improvement was driven by both a slight (1 per cent) recovery in exports and a 4 per cent fall in imports.

The main driver of the export improvement was an increase in commodity revenues, with a recovery in prices and export volumes assisting.

Metal ores and minerals, mainly iron ore, was up 6 per cent ($319 million), while coal exports recovered 9 per cent ($268 million) after port closures disrupted shipments in April.

Metals exports also increased by $128 million (17 per cent).

However, after April's extreme weakness, the rebound in mining exports disappointed analysts and saw Australia post a bigger trade deficit than the $2.2 billion that was expected.

Deutsche Bank senior economist Phil O'Donaghoe said exports of iron ore and coal tumbled in April, in part due to bad weather, and they failed to fully recover in May.

"Iron ore and coal exports are not going back to where they were a couple of years ago. It's pretty clear that demand from China has softened and we are past the boom clearly now," he said.

"We're not looking for these thing to be a source of growth moving forward."

'Is Australia still a developed economy?'

The extreme reliance of Australia's trade balance, economic growth and Commonwealth budget position on three major exports has led economist, and one-time advisor to former prime minister Kevin Rudd, Andrew Charlton to question, "is Australia still a developed economy?"

"Before the boom, Australia's export concentration was broadly in line with other similar high income countries. But by 2010 our export concentration had soared," Dr Charlton, who now runs economics consultancy firm AlphaBeta, wrote in a note on the data.

"Today our exports are more concentrated than the average of even the middle income countries, and even some low income countries like Nepal, Kenya, and Tanzania have greater export diversity than Australia."

While concluding that Australia obviously remains amongst the advanced economies, Dr Charlton warned that the nation's concentration in exports, combined with a domestic reliance on increasing debt to fund a real estate boom, has left Australia's economy dangerously exposed to commodity price fluctuations.

"For a decade, Australian governments have been operating on the assumption that, once the mining boom passed, low interest rates and a falling dollar would be enough to bring the non-resource sectors dancing out of their graves," he argued.

"Unfortunately, no such resurrection is occurring."

Falling dollar gives tourism a boost

One industry where the lower dollar does appear to be sparking a sustained revival is tourism.

An $18 million (1 per cent) rise in tourist spending within Australia in May was the biggest contributor to an increase in services exports.

The number of tourists flying into Australia is growing faster than the number of Aussies flying out. ( Reuters )

Meanwhile, Australians' spending on overseas travel fell 2 per cent, or $57 million, in the month.

Separate ABS figures show that short term visitor arrivals grew by 7.2 per cent in the year to April, while short term departures grew by 4.2 per cent.

The number of tourists from India soared by nearly 30 per cent in the year, while Chinese visitors jumped by more than 19 per cent.

Deutsche Bank's Phil O'Donaghoe said tourism arrivals are now consistently growing at a stronger rate than resident departures.

"We haven't seen that sustainably since the 1990s. That is a good sign of tourism exports picking up," he said.

"So the Aussie dollar's coming off and we're starting to see some signs of life in those tourism exports, that's encouraging."