Record high non-monetary gold exports widened Australia's trade surplus to a 7-month high of $5.7bn in February. This was more than double January's surplus of $2.3bn (revised from $2.6bn) and well above expectations to print at $2.9bn. Nearly $8bn of non-monetary gold was exported in February, driving a 4.9% rise in total exports for the month. This occurred alongside a 3.2% fall in imports - its largest decline in almost 2 years - leading to the wider trade surplus.
February's trade figures reported a $3.4bn widening in the trade surplus to $5.7bn, its highest since July last year. This latest result saw the 3-month average rise from $2.7bn to $3.8bn. In very volatile times for global trade, there have been opposing views around what this means for Australia, which has played out in the local dollar. The AUDUSD rose initially in response to the escalation of conflict in the Middle East and the subsequent closure of the Strait of Hormuz. This reflected expectations that surging oil and energy prices more broadly would boost Australia's terms of trade. However, this has since reversed with concerns over global growth ramping up - a headwind to the risk-sensitive AUD.
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Monthly exports rose by 4.9% in February to $45.6bn (8.9%yr). This came despite non-rural goods, a category dominated by the major resources (iron ore, coal and LNG), falling by 1.9%. As alluded to earlier, non-monetary gold exports were the major mover surging by 29.9% in the month to a new record high just below $8bn - effectively doubling over the past year on safe-haven demand. Rural goods were another key support lifting by 13.9% month-on-month (strongest rise since November 2024), following large increases across meat (26.8%), wool (13.1%) and other rural products (15.5%).
Imports weakened by 3.2% in February to roll back to around $40bn, a level last seen during the middle of last year. By contrast to exports, non-monetary gold imports fell away (-41.3%) from earlier increases. Capital goods dropped by around 8% in the month, but over the past year the category has been strongly supported by equipment to fit out data centres. Meanwhile, consumption goods rose by 3.4%, broadly reflecting the strength in consumer demand the RBA has sought to cool by hiking rates in February and March. Following falls of more than 3% in the prior two months, intermediate goods rebounded with a 3.1% rise in February.
Within intermediate goods, imports of fuels and lubricants fell 8.6% in the month to be down by 9.6% across the year. This is now clearly heading higher from March. For reference, fuel imports pressed highs of $6.5bn following the Ukraine war in 2022, with their current level in February being $3.7bn.
