Australia trade surplus unexpectedly dipped in August

Australia’s trade surplus has unexpectedly dipped by $643 million in August to $8.3 billion, undershooting expectations of a $10b surplus.

It’s the 56th consecutive monthly trade surplus but the second straight month of declines, suggesting “the days of record trade surpluses are over,” ANZ economists Madeline Dunk and Felicity Emmett said in a note.

The trade surplus fell more sharply in July, from $17.5b to $9b, as imports recovered.

Both imports and exports were up in August, the Australian Bureau of Statistics said on Thursday.

Exports were up 2.6 per cent to $56.8b, with thermal coal exports rebounding by 45.6 per cent following weather-related disruptions in July.

Imports rose 4.5 per cent to $48.5b, with all main categories of imports rising as supply chains disruptions unsnarled.
The “fuel and lubricants” category was the biggest contributor to import growth.

While the trade surplus was down 50 per cent from June’s record print, it’s still at historically high levels.

“We think the drop in commodity prices and slowing global growth (especially in China) will result in a reduction in Australia’s exports,” Barclays analysts Shreya Sodhani and Rahul Bajoria wrote in a note.

“Additionally, still-strong domestic demand for imported goods and increasing travel from Australia will likely compound these effects on the trade surplus.”

Dunk and Emmett said slowing global growth was likely to temper the surplus.

“We’ll be watching Australia’s export portfolio closely to determine how quickly we cascade down from the peak,” they wrote.

China’s embattled property sector has been casting shadows over iron ore exports, they added.

NAB economist Taylor Nugent said the figures showed the fall in shipping costs that began in February has yet to translate into lower freight costs for importers.

Freight service imports were 6.6 per cent of goods import value in August, compared to 6.5 per cent in July.

With news from AAP. Content has been edited for style and clarity.