Australia's trade surplus widened in November to $13.2bn as imports declined at a faster pace than exports. Although commodity prices have stepped down from their highs in 2022, exports remain around record highs. The services sector recovery continued with strong momentum into the back end of the year.
International Trade — November | By the numbers
- Australia's trade surplus widened to $13.2bn in November from $12.7bn in October (revised from $12.2bn), defying expectations for a narrowing to $11.3bn.
- Exports declined by 0.4% in the month to $59.3bn, which followed a 1.2% fall in October. Annual growth eased to 30.4% from 37.4%.
- Imports contracted for the third month running, down by 1.5% in November to $46.1bn after outcomes of -0.5% in September and -2.0% in October. Annual growth is still elevated at 27.1%.
International Trade — November | The details
Australia's trade surplus widened for the fourth month in succession, pushing above $13bn in November to its fourth largest outcome on record. A fall in imports (-1.5%) drove the wider trade surplus, despite exports also declining (-0.4%). The balance on goods trade remains highly elevated and expanded to $15.1bn. For services trade, the deficit swelled to wides of more than -$2.5bn around the middle of the year as travel ramped up post pandemic; in November the deficit came in to -$1.9bn.
Export values were softer in November (-0.4%) following a larger decline in the prior month (-1.2%). This month, the weakness was spread across rural (-0.6%) and non-rural goods (-0.5%) and non-monetary gold (-14.4%). Of note, the decline in non-rural goods came amid crosscurrents from rising iron ore exports (7.9%) but a sharp fall (-12.1%) in other mineral fuels (inc LNG), the latter largely reflecting lower prices.
The post-pandemic recovery in the services sector continued in November, with exports rising by 4.8% on the back of broad-based gains in transport (4.4%), travel (8.5%) and tourism-related services (8.7%).
Import values were 1.5% lower in November, to be around 4% down on August's record high ($48bn). The main drivers of that slide have been consumption (-2.1%m/m) and capital goods (-9.5%m/m), potentially highlighting a softening in demand conditions; however, an easing in supply chain pressures and input prices could also be playing through. Intermediate goods were relatively steady (0.6%), with the main component - fuel - seeing a 4.5% lift. Fuel import values are running almost 75% up on a year ago, broadly reflecting the surge in oil prices following the war in Ukraine and other supply disruptions.
Services imports (1.2%m/m ) continue to track a faster recovery than exports. Tourism-related spending has improved to be 29.2% down from its level at the end of 2019, while exports are 34.3% lower on a comparable basis.
International Trade — November | Insights
The trade surplus remains highly elevated. Exports have softened in the past two months but are close to record highs. Recent weakness in imports, including in the November report, could highlight some weakening in demand conditions, though inflationary effects on goods prices due to supply constraints could now be easing.
