Australia's trade surplus narrowed to an 8-month low in April but remained elevated at just above $11bn. Weakness in export commodities and rising capital goods spending drove the narrowing. The value of services exports has now caught up with imports.
International Trade — April | By the numbers
- Australia's trade surplus in April was $11.2bn, lower than expected ($13.7bn) and in from $14.8bn in March (revised from $15.8bn).
- Exports declined by 5% to $56.2bn (3.2%yr) following a 4.1% rise in the previous month.
- Imports were 1.6% higher in April at $45bn (prior: 3.7%m/m), up 8.5% over the year.
International Trade — April | The details
The monthly trade balance narrowed sharply to a surplus of $11.2bn, an 8-month low. The surplus on goods trade fell from $15.2bn to $11.2bn as services trade moved into balance, with exports and imports netting each other off at $8.7bn in April.
Export income was down 5% on the month to $56.2bn, its lowest since August-22. The value of goods exports declined by 7% on falls in rural (-9.3%) and non-rural goods (-6.1%); the volatile non-monetary gold component was another point of weakness (-19.7%). A mixture of lower commodity prices and reduced shipments weighed on export values for iron ore (-10.4%) and coal (-7.1%), driving the fall in non-rural goods. Coal exports retraced to a low going back to the start of 2022.
Turning to rural goods, while most categories are down from the highs of last year (with prices retracing), the value of meat exports continues to rise at pace, up 19.2% over the year.
Import spending remains elevated, with demand supported by lower prices due to the resolution of supply chain pressures. Yesterday's national accounts reported a 3.2% rebound in import volumes in the March quarter, with prices down 4% in the period. In April, imports were driven mostly by a 7.2% rise in capital goods spending.
In services trade, exports continue to advance on reopened borders; however, imports have trended a little lower over the past 6 months or so. This has allowed exports to catch up with imports.
International Trade — April | Insights
Despite narrowing sharply in April, the trade surplus remains elevated. This is also after the trade surplus widened in the first quarter of the year, driving another historically sizeable current account surplus of 1.9% of GDP.
