- Australia posted a $1.6 billion trade surplus in August, beating expectations of $1.4 billion.
- However, Capital Economics said the input data from international trade is still likely to detract from Q3 GDP.
- Looking ahead, the effects of a weaker Aussie dollar should see trade data start to benefit GDP growth in 2019.
Australia’s trade surplus for August increased to $1.604 billion in seasonally adjusted terms, beating forecasts of $1.4 billion.
Despite the increase, Capital Economics (CE) said net exports are on track reduce Q3 GDP growth by around 0.2%, having contributed 0.1% in March.
“The recent weakening in the Australian dollar, though, should mean that net exports add to GDP growth next year,” CE’s Paul Dales said.
The AUD was little-changed following the release and remains stuck below US71 cents after getting hammered overnight.
The result marks a slight increase from the $1.551 billion surplus in July. Net goods & services exports rose by $185 million for the month, while imports increased by $130 million.
And while US-China trade tensions continue to rattle global markets, two-way trade between Australia and China continues to hum along.
Australian imports from China amounted to 23.57% of total imports for the month, according to Commsec. That’s a new record high, as was the dollar-value of imports from China which totaled $US69.89 billion.
Commsec said total exports to China in August amounted to $US108.18 billion, up 1.2% from the previous month and also a new record high.
Export gains were driven by a 13% monthly increase in gold exports. Rural exports also rose by 3% m/m, despite the effects of the ongoing drought.
There were falls for iron ore (-3%) and coal exports (-2%), and CE’s Paul Dales said there could be more declines in the months ahead.
Imports climbed by 0.4% from the previous months, with gains driven by a sharp rise in capital goods imports.
However, Dales noted the bulk of that increase was driven by a 169% jump in the category for “civil aircraft and confidentialised items”.
“That is probably due to one or two very large imports rather than businesses in general importing more to build capacity,” he said.
“Overall, the strong surplus shows that the global trade war is not yet having a negative impact on Australia’s external sector.”
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