International Trade — November | By the numbers
- Australia's trade surplus lifted by $1.725bn to $A5.8bn in November and comfortably exceeded the market forecast of $4.1bn. October's trade surplus was revised down to $4.075bn from the $4.502bn figure reported initially by the ABS.
- Export earnings recovered modestly in November rising by 1.8% ($706m) to $40.893bn after slumping by 4.6% (-$1.952bn) in October. In annual terms, growth in export earnings lifted from 4.9% to 5.5%.
- Import spending fell by 2.8% (-$1.02bn) in November to $35.093bn following a broadly flat (0.3%) outcome in the month prior. On this result, growth through the year fell from +1.2% to -3.1%.
International Trade — November | The details
On the export side, total earnings were up by 1.8% or $706m in the month to $40.893bn as annual growth firmed from 4.9% to 5.5%. This was a modest improvement and is within the context of a broader slowdown since mid-year reflecting the correction in commodity prices from highly elevated levels. Breaking this result down further, goods credits lifted by a net $607m, with non-rural goods leading the way ($718m) supported by metal ores and minerals ($372m), other mineral fuels (inc LNG) ($184m) and coal ($52m). Rural goods were little changed overall, rising by a net $9m. Non-monetary gold slipped by $120m in the month. At a time of soft domestic demand, services exports remain a key support for the economy adding a further $99m in November to lift annual growth from 8.0% to 8.9%, with inbound tourism accounting for the bulk this month's increase ($62m).
Turning to the import side, weakness was renewed in November as expenditure contracted by 2.8%, or by $1.02bn, to $35.093bn, with the overall level down by 3.1% on a year earlier. The major headwinds for import spending are soft domestic demand conditions, most notably in the private sector, and a weaker Australian dollar making purchases offshore more expensive. Goods imports fell by $961m in November on broad-based weakness from consumption goods (-$610m), capital goods (-$259m) and intermediate goods (-$102m). In percentage terms, capital goods have slumped by 9.1% over the past year, while intermediate goods (-3.8%) and consumption goods (-2.9%) have recorded more moderate declines. Services imports softened by $58m as overseas tourism weakened (-$45m).
International Trade — November | Insights
A stronger than expected result today, with November's trade surplus a robust $1.7bn above the consensus estimate. However, the 3-month average has pulled back to a little above $5.3bn to be tracking at its lowest level since May 2019. This slowdown has been prompted by commodity prices, notably iron ore, moving down from highly elevated levels induced by the offshore supply shock relating to the tailings dam disaster in Brazil. Meanwhile, softness in imports is consistent with prevailing domestic economic conditions as the impact of a lower Australian dollar flows through to spending decisions of businesses and consumers.
