Australia's trade surplus widened to a 9-month high in March, supported by a rebound in iron ore shipments. Both exports (3.8%) and imports (2.5%) advanced in the month, the latter coming back from its largest month-on-month fall in four decades.
International Trade — March | By the numbers
- Australia's trade surplus increased to $15.3bn in March from $14.2bn in February (revised from $13.9bn). Consensus was for a narrowing to $13bn.
- Exports advanced by 3.8% to $59.3bn (16.5%yr), more than reversing a fall in February (-2.7%).
- Imports increased by 2.5% to $44bn (6.3%yr), but that was after a 10.2% slump in the prior month.
International Trade — March | The details
The nation's trade surplus lifted through $15bn in March to its highest level since June last year. March's surplus was $1.1bn wider than in February ($14.2bn), with export earnings (3.8%) outpacing import spending (2.5%).
Over the first three months of 2023, the surplus came to $40.3bn, widening from $38.3bn in Q4 2022. Export values lifted modestly in Q1 (0.5%), the main dynamic being income was driven by the services sector (7.2%) from the large inflow of tourists and students into the country. Imports contracted over Q1 (-0.9%) due to large falls in fuel (-12.9%) and many other inputs used in manufacturing, reflecting weaker demand and global disinflationary forces weighing on prices.
In March, exports (3.8%) posted their fastest rise in 6 months. Non-rural goods (3.9%) led the increase as the value of iron ore exports surged by 11.6% to their highest since August 2021, largely reflecting a rebound in shipments from disruptions earlier in the year. Rural goods (10.9%) were also a support with export values for meat, cereals and wool all rising sharply.
Imports rose in March (2.5%) as consumption goods (14.1%) rebounded from a sizeable decline in February. Across the other categories, capital goods (-2.5%) and services (-1.3%) fell while intermediate goods were flat (0.1%). The rebound in consumption goods came mainly on the back of shipments of new vehicles (23.9%) after they fell in February (-37.6%); this item has been very volatile of late suggesting some disruption to the flow of vehicles coming into the country. Food and beverages (13.4%) also rebounded in the month. Fuel imports were little changed at around $5bn, down from a high of $6.7bn 6 months ago.
International Trade — March | Insights
Australia's export income remains elevated supported by commodities and from overseas visitors as the services sector recovery ramped up following the reopening of the borders. Imports came under pressure in the first quarter of 2023. This reflects the disinflationary impulse from overseas (import prices fell 4.2% in the quarter) and also weaker domestic demand conditions.