Australian trade balance lifts back above $7bn in Sep, comfortably beating market expectations

Australian trade balance lifted back above $7bn in September, comfortably beating market expectations; the country’s August surplus was revised up by nearly $700 million, ANZ Research reported.

The monthly trade surplus rose to $7180 million in September, a decent gain on the upwardly revised August result and matching the more than $7,000 million monthly surpluses recorded in June and July.

Total resource exports rose 4.5 percent m/m in September and are now 22 percent higher than a year ago. Much of the gain has been driven by gold exports, however. Excluding non-monetary gold, resource exports were up 2.3 percent m/m and are just 1 percent higher than a year ago.

Rural exports were up a strong 6.4 percent m/m, driven by a sharp rise in cereal exports. Compared to a year ago, rural exports are down 2.3 percent. Service exports are up 0.8 percent m/m.

Capital imports excluding civil aircraft rose a strong 11 percent m/m and are 8.7 percent higher than a year ago. Much of the gain was in telecommunication equipment. Consumption imports remain soft and are little changed from a year ago, not overly surprising given the weakness in household spending.

Exports were up 3.5 percent m/m to be nearly 15 percent higher for the year. Imports gained 2.5 percent m/m, but are only up 3.2 percent y/y. It was encouraging to see capital goods imports rise by 11.6 percent m/m, for an annual gain of 8.2 percent. Imports of consumption goods were very subdued, up just 0.7 percent m/m and 0.8 percent y/y, the report added.