Australia’s trade surplus blitzed market expectations in June, but the result points to a more modest contribution from net-exports to Q2 GDP growth.
International Trade — June | By the numbers
- Trade Balance in June was +$A1.873bn, which was twice the market forecast for a surplus of +$A900m. May’s trade surplus was downgraded to $A725m from $A827m on revision.
- The change in the monthly trade balance was +$A1.148bn (prior $131m)
- Exports ($ value) increased by +2.6%m/m to $A36.439bn with annual growth at +12.9%
- Imports ($ value) eased by -0.7%m/m to $A34.567bn, while year-ended growth is +10.4%
International Trade — June | The details
The monthly trade surplus averaged $A1.064bn over the past 3-months compared to $1.119bn in Q1. The Australian Bureau of Statistics (ABS) reported that, after seasonal adjustments are applied, its preliminary estimate for the Balance of Payments in Q2 is $2.86bn, which is $490m lower than in Q1.
In June, the total value of goods and services exported increased by $914m (+2.6%) to $36.439bn. The increase was led by a $542m rise in non-rural goods, with gains spread across 'metal ores and minerals' (mainly iron-ore) +$118m, ‘other non-rural (inc sugar and beverages)’ +$117m and ‘other manufactures’ +$109m. Services exports lifted by $87m in June to $7.385bn, with tourism accounting for all that increase.
For imports, the bill in June eased by $233m (-0.7%) to $34.567bn. This decline was largely from fuel (-$366m) — reflecting weaker prices on global commodities markets. Consumption goods also declined by $14m. Capital goods provided some offset, rising by $313m, which was led by industrial transport equipment (+$107m). Services imports declined by a modest $22m to $7.623bn.
International Trade — June | Insights
Net-exports led GDP growth in Q1 (+1.0%) with a strong contribution of +0.4ppt (rounded). For Q2, this could be more in the range of +0.1ppt. The softening in the estimate for the Balance of Payments could point to a decline in the Terms of Trade over the June quarter, which would be in-line with last week's ABS International Trade Price Indexes data showing that import prices (+3.2%q/q) increased by more than export prices (+1.9%q/q).
