The fastest rise in imports in 5 months compressed Australia's trade surplus to just $0.5bn in August from $1.4bn in July, disappointing expectations to widen to $2bn. The tech-related capex surge drove imports to a 5.8% increase, outpacing a 3.7% rise in exports.
The trade surplus was just $0.5bn in August, averaging $1.3bn over the past 3 months. That represents a significant narrowing from its level 12 months ago ($3.9bn), with volatility in global trade and geopolitics and the tech sector capex surge all playing a role.
Exports rebounded from a fall in the prior month (-3.6%) to rise by 3.7% in August to $47.4bn, an increase of 15.4% over the year. The key movement came from the volatile non-monetary gold category that saw a 20.2% lift. That was added to by a 2% rise from non-rural goods, driven by coal (4.7%), LNG (2.8%) and metals (11%) exports. Iron ore - the nation's highest value export - underperformed with a 1.5% decline.
Imports, coming off back-to-back falls in June (-1.3%) and July (-2.4%), accelerated by 5.8% in August to $46.9bn. That lifted annual growth from 14.1% to 16.6%. In the month, capital goods found renewed strength (22.3%) on the back of a pick-up in data centre-related equipment (79.3%) and telecommunications (12%). In other movements, non-monetary gold imports (91.1%) increased at their fastest pace in over 5 years, while consumption (-7%) and intermediate goods (-2.2%) fell. This was the 4th straight fall for intermediate goods as global oil prices were retracing from their Gulf conflict highs.
