Net exports were the big driver of yesterday’s 1.1% rise in first quarter GDP.
It lead a lot of forecasters and commentators to say that the strength couldn’t last and Deutsche Bank likened the strength of the growth spurt to a famous political quote that this was Australia’s five minutes of economic sunshine.
So the pressure was on the trade data today to show that exports are holding up.
However, exports fell 1% and imports rose 2% which, according to the ABS, lead to a a seasonally adjusted balance on goods and services deficit of $122 million in April 2014, a turnaround of $1.024 billion compared to March.
That is a big turnaround in one month.
But while the headline number might disappoint, the growth in Port Hedland throughput suggests that it is not iron ore that is going to be a drag anytime soon on trade or the national accounts.
Australia’s once mighty coal export engine is clearly lagging, as the chart above shows.
But the ABS says that it was rural goods and the somewhat volatile non-monetary gold exports which dragged exports into the red for the month.
“Rural goods fell $208 million (6%), non-monetary gold fell $131 million (11%), non-rural goods fell $96 million and net exports of goods under merchanting fell $3 million (19%). Services credits rose $17 million.”
In terms of the growth in imports the fact that a large part of the increase was in capital goods (+$399 million) is good news even though consumption goods also rose strongly (+$192 million).
Overall a disappointing headline but good underlying structure to Australia’s trade data.