Australia's surplus on goods trade declined to $5bn in March, its narrowest level in more than 3 years. Import spending has accelerated over recent months, partly driven by a weaker Australian dollar, while export earnings have held up despite falls in key commodity prices as shipment volumes rebounded from earlier weather-related disruptions.
The goods surplus for March came in at $5bn after falling from $6.6bn in February (downwardly revised from $7.3bn). This continues the trend of narrowing surpluses over recent months - the surplus for Q1 contracted by more than 25% to $21.3bn, its lowest quarterly aggregate since Q4 2020 - driven by a sharp rise in import spending as export earnings broadly flatlined.
Exports for March were little changed (0.1%) at $44.9bn around broadly offsetting contributions from rural (2.8%) and non-rural goods (-0.4%). For the quarter, exports fell by 0.9% to $136.1bn. This decline was driven mainly by non-rural goods (-2%) as iron ore and coal prices retraced and shipments were disrupted by cyclones early in the new year (before rebounding in March).
Import spending posted a 4.2% rise to $39.9bn, the fourth consecutive month-on-month increase. This was led by an 8% surge in capital goods while consumption and intermediate goods both rose by 4.1%. In Q1, the value of goods imported lifted by 6% to $114.8bn, a record high. A factor within that rise is a lower Australian dollar (making imports more expensive), which fell by around 1.8% on a trade-weighted basis in the quarter. Consumption goods rose by 10% in the quarter with new vehicles (7.7%) and clothing and footwear (13.7%) playing prominent roles; capital goods (5.8%) and intermediate goods (3.6%) also advanced in Q1, the latter rising despite a slide in fuel imports (-3.3%).
