International Trade — January | By the numbers
- Australia's trade surplus declined by $166.0m to $5.21bn in January, though markets had anticipated a more material fall to $4.8bn. December's trade surplus was revised up from $5.223bn to $5.376bn.
- Export earnings fell by 2.8% in the month (-$1.166bn) to $40.122bn, which more than offset the gains from November (1.5%) and December (1.2%). Annual growth fell from 8.3% to -0.2% posting its first contractionary result since December 2017.
- Import spending fell by 2.8% (-$1.001bn) in January to $34.911bn to more than retrace December's 2.2% rise. Growth through the year stepped down from 5.7% to -1.7%.
International Trade — January | The details
Export earnings sustained a 2.8% hit in January (-$1.166bn) with the aggregate of $40.122bn sliding to its lowest since April 2019. Our summary table (above) shows this was entirely due to weakness on the goods side, specifically in non-rural goods (-$714m) that centred on a sizeable fall in iron ore shipments (-$792m) and the volatile non-monetary gold category (-$735m). A minor moderation came through from rural goods ($236m) driven by rises in meat and cereal exports. Meanwhile, services exports advanced by $54m in the month, and with travel accounting for $25m of that, the ABS confirmed there had been no discernible impact evident as yet from the summer bushfires and coronavirus outbreak.
Switching to imports, growth in expenditure remains weak in line with soft domestic demand and a lower Australian dollar. January's 2.8% contraction (-$1.001bn) was led mainly by a sharp fall in capital goods (-$640m) amid a 12.5% fall in the category over the year. Intermediate goods declined by $466m, mainly due to fuels and lubricants (-$365m) as global oil prices lifted towards the end of 2019. Consumption goods were down by a relatively modest $19m in January to be broadly flat over the year (0.5%), which is a logical response to a lower domestic currency. Services imports are also impacted by exchange rate weakness (-$101m mth) with annual growth slowing to 2.9% from 8.5% a year ago.
International Trade — January | Insights
Overall, the trade surplus in January was little changed at $5.21bn, whereas markets had anticipated a steeper fall to $4.8bn. Next month, however, significant impacts are expected to start coming through in these data following the disruptions to trade as China went into lockdown after the coronavirus outbreak. A more pronounced bushfire-related impact could also be on the cards, most notably in inbound tourism.