Australia’s trade surplus narrowed again in July, falling to $460 million in seasonally adjusted terms.
The result is well below the forecast surplus of $1 billion. It’s also a drop from the previous month’s surplus of $856 million, which was subsequently revised up to $888 million.
Total exports fell by 2% to $31.071 billion. After a 4% drop in June, exports of non-rural goods fell by another 3% to $18.896 billion. Total services exports rose by 3% to $6.308 billion.
For non-rural goods, which makes up around three quarters of total goods exports, the value of metal ores and minerals (mainly iron ore) fell to $6.343 billion from $6.458 billion, a drop of 2%.
Total exports for coal, coke and briquettes — the second biggest goods export component — also fell by 2%. Other mineral fuels (LNG) fell by 12% in seasonally adjusted terms to $2.725 billion.
Westpac analysts were left unimpressed by the latest figures.
“The takeout, this is a disappointing start to the September quarter,” the bank said. “Expected gains in metal ores and coal failed to materialise, with both recording small declines — $115 million and $108 million respectively.”
“These declines were despite the iron ore price moving higher in the month and coal shipments moving higher, as suggested by unofficial data.”
This table from the ABS breaks down June’s trade report in seasonally adjusted terms:
Total imports also decreased to $30.611 billion, from $30,893 billion in June.
That was driven fall a fall in total goods imports, to $24.178 billtion from $24.513 billion. Services imports rose by 1% in July to $6,433 billion.
Capital Economics chief economist Paul Dales explained why the import figure didn’t surge despite the arrival of a huge LNG platform from South Korea.
“Indeed, the floating platform category of the data measured on a recorded trade basis rose by $8 billion in July,” Dales said.
“But the headline import data spread out the cost of such items over the period of their construction rather than when it arrives, so most of it will already have been included in the data.”
Looking ahead to Q3 GDP, Dales said that the July figures suggest exports are on track to repeat Q2’s 0.3% contribution to economic growth.