Australia's trade surplus narrowed to $2.6bn in January from $3.4bn in December, coming in well below expectations ($3.8bn). Exports made a soft start to 2026 (-0.9%) as imports lifted modestly (0.8%). Robust domestic demand has driven growth in imports over the past year (5.9%), far exceeding export growth (0.9%).
Today's trade figures reported a surplus of $2.6bn in January, around its average of the past 3 months. Australia has run monthly trade surpluses for the best part of a decade now, though the surpluses of recent times have been amongst the narrowest over that period. The strong Australian dollar, currently around its highest levels on a trade-weighted basis since late 2017, will continue to support import spending (if sustained), and contribute to narrower surpluses than otherwise through 2026.
Export revenue fell 0.9% in January to $44.1bn, the level little changed over the past 12 months (0.9%). Key drivers in the month were declines in rural goods (-5.2%) and non-rural goods (-1.7%), with some offset coming through from non-monetary gold (9%). Rural goods lifted strongly over the back half of the year, so the fall in January represented a pullback. The decline in non-rural goods came on the back of falls in coal (-4.4%) and iron ore exports (-1.5%). Meanwhile, non-monetary gold rose (9%) to be pressing record highs.
Imports in January firmed by 0.8%, rebounding from a 1.8% fall in December to print at $41.4bn (5.9%yr). Capital goods rose by 5.1%, largely reversing its decline in the previous month as ADP equipment (related to data centres) surged by 50.4% in the month to be up 83.9% over the year. The strength in capital goods was accompanied by non-monetary gold (46.8%), more than offsetting declines in consumption goods (-3.7%) and intermediate goods (-4.5%).
