Labor and the Treasury will be watching last night’s manufacturing data from Asia with concern, as it has direct implications for this year’s budget surplus.

The domestic economy has entered the 2012-13 financial year with a head of steam, buoyed by carbon compensation payments and a huge investment pipeline in mining. In the budget papers in May, Treasury forecast unemployment to rise to 5.5% this year, on the back of 3.25% GDP growth, both of which currently look safe predictions; its 3.25% inflation forecast, if anything, now looks too high, but we’re yet to see the impact of the carbon price.

This morning retail sales data for June confirm the economy ticking over nicely, with 1% growth seasonally adjusted, and more to the point spread both geographically and across expenditure groups. While food, as usual, was strong, even perennial poor performers department stores and clothing both showed growth. And while boom state WA is still the strongest performer in retail in trend terms, NSW recorded strong growth, confirming that the deep malaise that beset the largest state economy has lifted under Barry O’Farrell.

In preparing its budget forecasts, Treasury also expected Europe to continue to perform poorly, with -0.75% growth this calendar year, shifting to 0.75% next year, which looks optimistic given continuing evidence manufacturing data out this week (British manufacturing plunged in June, suggesting that the expected Olympic-fuelled return to positive growth this quarter is in danger). It was more optimistic on the US — too optimistic, it seems, predicting 2% this year accelerating to 2.25% next year, which is now at odds with the Fed’s overnight statement that the US economy had “decelerated somewhat over the first half of the year”.

But the poor manufacturing data from Asia, in which only Indonesia saw improved conditions in July, wasn’t in Treasury’s crystal ball. It predicted Chinese growth to “remain solid, despite some slowing in domestic activity” and a positive outlook for other Asian countries. Treasury devoted special attention to Asian markets in the budget papers, noting “Australia’s natural resource base and location in the Asian region have allowed our exporters to take advantage of the expanding markets of emerging Asia at a time of relative weakness in the world’s advanced economies” and that “Australian businesses have been re-orientating their exports towards emerging Asia for many years and this shift has been even more marked since the global financial crisis”.

But if Asian countries stop manufacturing and exporting as much, that will have direct impacts on Australian exporters, who in “taking advantage of the expanding markets of emerging Asia” are therefore more dependent on them, particularly commodity exporters.

That means revenue from the mining tax, already revised down in the budget, may have to be revised down again. It also means flatter corporate tax revenue. Treasury cut its expectations for corporate tax by $2.7 billion dollars in 2012-13 (after cutting its 2011-12 forecast by $2.6 billion); corporate tax revenue depends disproportionately on two sectors, banking and mining, meaning softer Asian markets will flow through to lower corporate tax revenue. The exchange rate won’t be much help, either: despite falls in commodity prices, it is sticking right where Treasury forecast it to be, around 103 US cents.

Today’s trade data, which showed a small surplus on goods and services for June, suggest there’s no softening yet of exports, although year-on-year there was a large fall from over $21 billion in 2010-11 to nearly $6 billion in 2011-12.

None of this is to criticise or second-guess Treasury; the shifts in revenue are unlikely to be massive and are a natural consequence of changing external economic conditions. A couple of billion dollars either way isn’t going to have too much impact, certainly not on the economy and not on the federal budget either. But the forecast surplus of $2.5 billion is so thin, and the political significance attributed to it so great, that normally minor changes such as this are suddenly the stuff of political drama, and likely to see a further round of spending cuts in November when MYEFO is released.

From a fiscal discipline point of view that’s welcome — governments usually grow more lax as they age. But politically it doesn’t give Labor much chance to maximise its election year chances with more targeted spending.