Australia's trade surplus came in at $1.9bn in July, above the $1.5bn figure expected. Exports (-3.3%) fell by more than imports (-2.5%), narrowing the surplus from $2.3bn in June (revised up from $1.9bn).
July's $1.9bn trade surplus followed a $2.3bn surplus in June, marking back-to-back surpluses for the first time since the start of the year. The Gulf conflict has increased volatility in global trade, which was already recovering from tariff-related uncertainty. The 3-month average for the trade balance was a wafer-thin surplus of $0.6bn, down from $4.2bn a year ago. That compression reflects growth imports (14.1%yr) significantly outpacing exports (2.6%yr)
Exports declined by 3.3% in July to $46.3bn (2.6%yr). The main source of weakness was in non-monetary gold, those exports down 26.1% on the month. Non-rural goods were broadly flat (-0.2%) as LNG exports lifted strongly (9.6%) only to be offset by declines in iron ore (-1.6%) and coal exports (-4.3%). Defying the trend, rural goods increased by 5.8% for the month on the back of a strong increase in cereals (19%).
Imports were down for the third month running posting a 2.5% fall, coming in at $44.3bn (14.1%yr). Declines in global oil prices amid optimism around a durable reopening of the Strait of Hormuz saw fuel imports fall by 12.3%m/m, extending their decline over the past 3 months to 29%. That saw intermediate goods imports fall 7.8% in July.
That outweighed increases in capital (6.7%) and consumption goods (3.5%). Data-centre related imports looked to pick up as ADP equipment rose 50% in the month, driving capital goods. Meanwhile, consumption goods were boosted by vehicle imports (8.2%), a key theme in yesterday's June quarter economic growth figures (see here).
