International Trade — October | By the numbers
- The nation's trade surplus stepped down by $2.345bn in October to $4.502bn in October; well below the median forecast for a $6.5bn surplus, and was the lowest monthly surplus since December 2018. September's trade surplus was revised down by the ABS in this report to $6.847bn from $7.18bn.
- Export earnings fell by 5.1% in October (-$2.205bn) to $40.750bn (prior +2.8%m/m), with annual growth pulling back from 14.6% to 6.0%
- Import spending lifted by 0.4% in the month (+$140m) to $36.248bn (prior +2.6%m/m), though annual growth slowed from 3.3% to 1.6%.
International Trade — October | The details
Export earnings were down by 5.1% in October; their steepest monthly fall since April 2017, representing a hit of $2.2bn compared with the previous month, while annual growth was cut from 14.6% to 6.0% to be at its slowest pace since March of last year. This decline was led by non-rural goods (-6.2%m/m, +1.6%yr) reflecting an 11% fall from metal ores and minerals (mainly iron ore) on weaker prices, as coal (-5%) and other mineral fuels (LNG) (-6%) also fell in the month. Volatile non-montary gold fell by 24.7% in October to largely reverse an increase in the previous month. Rural goods saw a second consecutive monthly rise, with a 2.8% lift in October resulting in annual growth jumping from -1.2% to 10.0%. This appears likely to be driven by higher meat and cereal prices due to drought. Service exports firmed by 0.5% in October to be up by a robust 8.2% on a year earlier.
Import spending lifted modestly by 0.4% in the month, or by $140m, though annual growth halved from 3.3% to 1.6% on a base effect. Leading the way was consumption goods with a 3.8% rise and is now up by 6.7% year-on-year as the impact of a weaker Australian dollar plays through. Intermediate goods also lifted by 2.3% in October but are down by 3.3% over the year. Capital goods contracted by 2.3% in the month and have softened by 0.6% in annual terms in line with weakness in business investment. Services declined by 0.5% in October, which slowed annual growth from 4.7% to 3.2%.
International Trade — October | Insights
The narrowing in the nation's monthly trade surplus from $6.8bn to $4.5bn in October comes due mainly to a moderation in iron ore prices from their mid-year peak. However, prices remain relatively high by historical standards and will likely continue to support national income growth. In addition, the services sector is performing strongly and is helped by a lower Australian dollar. Meanwhile, annual growth in imports remains soft in response to weak domestic demand conditions.