Australia: Trade surplus evaporates on adverse price movements - Westpac
In October, Australia’s trade surplus evaporated, printing at $0.1bn, down from $1.6bn in September, notes Andrew Hanlan, Research Analyst at Westpac.
“The narrowing of the surplus was sharper than anticipated, with the market centred on $1.4bn and Westpac $0.9bn.”
“Export earnings declined and the import bill rose, with adverse price movements a key factor in October.”
“Exports declined by $0.9bn, -2.8%, which was weaker than anticipated, a forecast -1.9% A dip in the iron ore price, which has since largely reversed, was a key negative in October.”
“Imports increased by 1.9%, exceeding our expectations, a forecast 0.9%. The cost of imports rose as the currency fell, down 2.3% against the US dollar in the month.”
“This is a disappointing start to the December quarter, with the monthly trade surplus having averaged $1.0bn in the September quarter.”
“Going forward, there are positives. The uptrend in export volumes will continue, led by LNG as new capacity comes on stream and by services to meet strongly rising demand from the Asian region.”