Australia just posted another large trade surplus

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  • Australia recorded another large surplus in February, the ninth in 10 months.
  • In dollar terms, exports and imports were largely unchanged from a month ago.
  • Net exports are currently on track to make no contribution to Q1 GDP growth.

Australia recorded another large trade surplus in February, continuing the solid run of results seen since late 2016.

According to the Australian Bureau of Statistics (ABS), a surplus of $825 million was reported in seasonally adjusted terms, topping forecasts for a smaller figure of $725 million.

January’s trade surplus, originally reported at $1.055 billion, was revised down to show a surplus of $952 million.

Over the month, exports rose by $2 million to $34.23 billion.

Within the monthly figure, exports of rural goods rose $552 million, largely offsetting a sharp $505 million decrease in non-monetary gold exports. The latter rose strongly in the prior month, helping to boost the size of Australia’s trade surplus.

Elsewhere, the value of non-rural goods — the largest component by dollar value — fell by $90 million.

The decrease was driven by declines in exports of transport equipment and other manufactured goods, masking increases of $200 million, $58 million and $90 million respectively for metal ores and minerals (iron ore), coal, coke and briquettes and other mineral fuels (LNG).

Services exports also rose, increasing by $45 million from a month earlier.

This table from the ABS breaks down each category by dollar and percentage change in seasonally adjusted terms.

Source: ABS

On the other side of the trade ledger, imports rose by $130 million to $33.4 billion.

From January, the value of consumption goods imports jumped by $547 million, coinciding with a strong lift in Australian retail sales over the same period.

Imports of non-monetary gold, capital goods, and services also grew, rising by $70 million, $60 million and $110 million respectively.

Those increased were partially offset by a $657 million decline in the value of intermediate and other merchandise goods imports.

Within that figure, $601 million was due to weaker imports of fuel and lubricants.

Taking into consideration price changes seen over the March quarter, Paul Dales, chief economist at Capital Economics, says net exports are currently on track to neither detract or add to GDP growth.

“After taking into account price effects, it appears as if real exports and imports both rose by about 2.5% in Q1 as a whole,” he says.

“The resulting neutral contribution to real GDP growth would be better than the 0.5 percentage point drag in Q4 and help to offset the probable easing in consumption growth.”

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