Australia's trade surplus lifted modestly from $2.6bn to $2.8bn in September, its widest in 7 months, defying expectations to narrow to $1bn. Exports rose 2.3% in the month on the back of strength in the commodities complex, reaching their highest level since March 2023. That contrasted with a 3.3% fall in imports - their 3rd decline in the past 4 months - with the renewed pressures on global oil prices yet to impact fuel imports.
The monthly trade account was in surplus by $2.8bn in September, with exports ($48.4bn) exceeding imports ($45.6bn). It averaged a surplus of $1.5bn over the past 3 months, while it was in surplus by $4.5bn over the quarter. Australia has seen its trade surpluses compress notably this year, and was in fact in deficit in March and May for the first time in around a decade. The AI-related investment boom has seen imports surge, while higher fuel prices due to the conflict in the Gulf have also played a role. However, exports hit back in the latest quarter to some degree rising by 2.6% to $141.7bn, outpacing a broadly flat result (0.2%) for imports ($137.2bn).
In September, exports lifted by 3.3% to $48.4bn (10.4%yr). The key driver was non-rural goods (2.8%) as most of the major commodities (excluding coal -3.5%) saw gains: LNG 6.6%, metals 23.5%, and iron ore 2.3%. The chart below shows quarterly commodity exports, with LNG, or 'other mineral fuels' (pink line), ramping sharply of late on the back of the rise in global energy prices caused by the Gulf conflict. A 3.6%m/m rise in rural goods, driven by meat (11.3%), also supported the lift in exports.
Monthly imports fell by 3.3% to $45.6bn but are still up by almost 12% since September last year. Aside from a large decline in volatile non-monetary gold (-34.7%), the overall weakness reflected falls in consumption (-2.2%) and capital goods (-2.5%). Car imports (-4%) weighed most on consumption goods, while capital goods - the category that has been boosted by the AI-related upswing - declined as aircraft orders pulled back (-33.7%) after recent gains. Intermediate goods were up modestly (0.9%) but are set to rise much more sharply on the back of the renewed rise in global oil prices, as they did earlier in the year after the conflict escalated.
