Australia's trade surplus remained elevated in October at $12.2bn, little changed from the month prior. Exports were softer but remain close to record highs while imports declined on the back of an easing in fuel prices.
International Trade — October | By the numbers
- Australia's trade surplus came in at $12.2bn, broadly as expected ($12bn) and little changed from September ($12.4bn).
- Exports were 0.9% lower to sit at $60.1bn, just below June's record high and up 38.4% over the year.
- Imports declined for the first time in 4 months, off 0.7% in October to $47.9bn. Import spending is up 43.8% on a year earlier.
International Trade — October | The details
The trade surplus was near unchanged in October from the month prior with only modest movements in exports (-0.9%) and imports (-0.7%). The balance on goods trade was $0.2bn lower but in surplus to the order of $14.7bn; the services balance was flat at -$2.5bn and has been in deficit for the past year as Covid restrictions on travel have eased.
Export earnings declined due mainly to the volatile non-monetary gold component (-20.5%m/m). Non-rural goods were also a driver of the overall weakness (-0.5%) as exports of metal ores and minerals (iron ore) declined by 2% on a combination of lower prices and shipment volumes. Monthly iron ore exports have been running at an average of $14.1bn in 2022, broadly in line with the October result ($14.2bn). Rural goods advanced by 1.7% in the month and have surged by 45% over the year. Favourable weather conditions have supported production in the sector while strong demand amid supply global constraints due to the war in Ukraine have elevated the prices for many of these goods.
Services exports moderated to growth of 0.4% in October (45.1%yr), with the sector still in recovery mode from the pandemic. Earnings from transport services (including passenger travel) are still down by more than 20% on their level at the end of 2019.
Import spending declined on the back of falls in capital (-1.7%) and intermediate goods (-0.8%). The decline in intermediate goods was notable as it was driven by a sharp fall in fuel imports (-7.1%) reflecting lower oil prices on global markets. However, the earlier acceleration in prices following the Ukraine war sees the value of fuel imports up by almost 90% over the year. In October, consumption goods lifted (1.2%) as vehicle imports rebounded (16.9%).
Services imports increased by 0.6% to be up 86.5% over the year. Overseas tourism has been rebounding rapidly as travel restrictions have eased, though spending in the category is still around 35% down on its pre-pandemic level.
International Trade — October | Insights
Another elevated result for the monthly trade surplus in October. Yesterday's national accounts reported that Australia's international trade dynamics became less favourable during the September quarter as the terms of trade declined from a record high as commodity prices retraced. Data earlier in the week showed Australia's current account turned back into deficit for the first time since 2019.
