International Trade — February | By the numbers
- The trade surplus increased by $450m in February to $A4.801bn, much stronger than the $3.7bn market forecast. January's surplus was lowered in this update to $4.351bn from the $4.549bn figure reported initially.
- Export earnings were little changed in February, rising by $77m, or by +0.2%, to $A39.833bn, with annual growth at 13.2% (prior rev: +4.8%m/m, +15.4%Y/Y)
- The import bill declined by $374m, or by -1.1%, in the month to $35.032bn, slowing annual growth to 4.4% (prior rev: +3.9%m/m, +6.1%Y/Y)
International Trade — February | The details
Starting with the export side, total earnings lifted by a very modest $77m in the month. The underlying detail was mixed; non-rural goods +$127m and services +$136m largely offset by non-monetary gold -$142m and rural goods -$44m. The non-rural goods category includes the major resources commodities, in which iron-ore recorded a $958m increase mostly due to stronger prices, though coal exports fell by $760m on softer prices and volumes. Meanwhile, other mineral fuels (including LNG) lifted by $97m in the month. The rise in services exports is mostly due to a $117m increase in tourism-related services by overseas visitors.
On the other side of the ledger, the total value of goods and services imported fell by $374m in the month, with the weakness centred on capital goods -$155m and intermediate goods -$443m. Consumption goods lifted by $12m and services increased by $235m. The fall in intermediate goods was largely due to fuels and lubricants -$344m. Capital goods were headlined by a $222m decline in ADP equipment. Services imports reflected a $209 rise in overseas tourism and a modest lift in 'other' (business) services.
International Trade — February | Insights
February's record $4.8bn surplus follows January's surplus of $4.35bn, which was the third-highest monthly surplus on record. That gives an average surplus of around $4.6bn per month, a vast acceleration on the $2.9bn average monthly surplus over Q4. This looks to be predominantly driven by elevated commodity prices for the nation's key exports, notably iron-ore, following the supply shock in response to Brazil's tailings dam disaster. Last night's Federal Budget confirmed a greatly increased company tax in-take in 2018/19 driven by increased profitability in the mining sector, with more to flow through in 2019/20 providing the scope for tax relief announced for low-and-middle-income households.
