Australia’s trade surplus for August rose to $989 million in seasonally adjusted terms, beating forecasts for an $850 million surplus.
Data from the Australian Bureau of Statistics showed that the August reading was helped by a revision higher to the July surplus, which rose to $808 million from $460 million.
The result was driven by a rise in export values while imports stayed constant. The seasonally-adjusted rise in exports was led by a 10% increase in iron ore, due to higher prices and volumes before the recent price falls in September. Those gains off-set a 3% fall in coal exports and a 19% decrease in gold exports.
In seasonally-adjusted terms, imports data revealed a $360 million fall in consumption goods imports and a $170 million decrease in capital goods imports. That was offset by a $386 million rise in imports of intermediate and other merchandise goods.
This table from the ABS breaks down the August trade report in seasonally adjusted terms:
For Westpac economist Andrew Hanlan, today’s result is reflective of Q3 trade data which has so far been underwhelming.
“Pending a late flurry of exports in the September month, there is the risk that real net exports are flat to a negative in the September quarter, rather than being the positive for growth that we have factored into our Q3 GDP forecast,” Hanlan said.
That’s not a great sign for quarterly growth, particualry when combined with this morning’s poor retail sales result which is a clear indicator of headwinds for domestic consumption — the biggest component of quarterly GDP.
“To date, export volumes appear to be disappointing, dented by some one-off disruptions, particularly in the resources sector,” Hanlan added.
Capital Economics chief economist Paul Dales took a more optimistic view of this morning’s result. Dales said that the increase in August combined with upward revisions in previous months indicates that net exports may provide 0.6% to Q3 GDP growth.
“That would beat the positive contribution of 0.3% in the second quarter and offset some of the probable weakening in consumption growth,” Dales said.
This chart from ANZ displays the latest trade surplus in a historical context: