Australia's surplus on goods trade was around $11bn in December, narrowing less than expected ($10.5bn) from November's $11.8bn figure. A rebound in import spending (4.8%) outpaced exports (1.8%), the latter up for the third month in succession. Exports (2.8%) and imports (-2.9%) posted broadly offsetting movements in the final quarter of 2023.
The nation's trade surplus came in around $11bn in December, narrowing from an 8-month high of $11.8bn in November (revised from $11.4bn). Over the December quarter, the surplus widened by $7.1bn to $30.1bn, driven by increased export revenue from higher prices and a decline in import spending on softer demand.
Exports rose by 1.8% month-on-month in December ($47.1bn), driven largely by volatile non-monetary gold (20.2%m/m). Both non-rural (0.9%) and rural goods (0.5%) also advanced. For the quarter, exports were up by 2.8%, but this looks to reflect higher prices; last week the ABS reported export prices increased by 5.6% in Q4, implying a contraction in volumes terms. The quarterly increase in export revenue was driven by non-rural goods (4.7%) on sizeable boosts from iron ore (8.2%) and coal (5.1%). Both these commodities saw large price rises in Q4, according to last week's data: iron ore 7.4% and coal 11.6%.
Import spending saw a 4.8%m/m rise to $36.2bn, rebounding after large falls in October (-3.5%) and November (-8.4%). The swing came from consumption goods (9.8% from -13.5% in November) on the back of vehicle imports. Overall, imports declined by 2.9% in the quarter. The ABS reported a 1.1% decline for Q4 import prices, pointing to a contraction in volume terms. The major contributors to lower quarterly spending on imports were consumption (-6.8%) and capital goods (-5.3%). Weaker demand looks to be behind these declines, with prices for consumption goods rising (2%q/q) and holding broadly flat for capital goods (0.1%q/q).
