The Australian Bureau of Statistics (ABS) has just released trade data for the month of January, with Australia’s trade deficit increasing to a seasonally-adjusted $1,057 million, from $688 million in December (revised upwards from $427 million).
It was the thirteenth consecutive month that Australia has recorded a monthly trade deficit (see below chart).
In seasonally adjusted terms, exports fell $185m (1%) to $25,023m. The decrease in exports was compounded by a $185m (1%) increase in imports to $26,081m.
Australia’s two major export commodities – iron ore (26% share) and coal (17% share) – fell by by -$440 million and -$417 million respectively. Gas exports (6% share) also fell marginally (-$59 million), whereas Australia’s third biggest export – gold (7% share) – rose by $153 million over the month (see below chart).
Exports to China fell sharply, down by -$939 million (-13%) over the month, taking its share of total exports to 34%. Exports to the three other major markets – Japan (-$493 million), Korea (-$304 million) and India (-$450 million) – also fell over the month of January (see below chart).
Western Australia continues to dominate the nation’s exports. It alone accounted for a record 52% of Australia’s merchandise exports in January, despite exports falling by 9% over the month. By comparison, exports from Queensland crashed by -30% (see below chart).
Western Australia is also the only state with a meaningful trade surplus:
Finally, Australia’s services trade balance improved in January (+$108 million), and has essentially stabilised over the past five months after a horror run since late-2008 on account of the high Australian dollar (see below charts).
unconventionaleconomist@hotmail.com
13 consecutive months of CAD leading to the top of the investment phase of the greatest terms of trade swing/mining boom in our favour ever.
Spent on what?
Australias biggest four exports – coal, iron ore, gas and gold. We are a banana republic of cargo cultist rent seekers.
Balance of payments issue anyone?
Gunna
We’ve had a CAD every month, month after month pretty much since forever.
All we are talking here is the trade balance which is more or less irrelevant, and to a large extent misleading, in terms of how we, as a nation, are actually going financially.
Never the less you are right. If the trade balance is negative now with ToT as they are then we are really in deep doodoo.
Yeah I know what you are saying flawse – we have been running a CAD for generations. And every now and then we have a real or pseudo balance of payments issue to go with it.
I reckon it will be the AUD which takes the shock again when it comes. But the longer it is nailed to the roof by Forex markets and its yield/AAA rating, then I reckon the bigger that crash becomes.
We are in deep doodoo – no if about it for mine. And I dont reckon we are that far from having the average punter in the street perfectly aware of it.
Gunna I knew you knew the difference but the average punter hasn’t a clue. He/she has been fed the trade balance figures in MSM headlines all these years. For a while there these numbers were positive so everyone thinks we are booming and so smart!
Puts on tinfoil hat…Now why has there been such emphasis on the Trade balance and not the CAD all these years?
As I said elsewhere Barnaby Joyce and Paul Keating got absolutely pilloried in MSM for daring to raise the topic.
Note also both shut up about it thereafter.
Makes me wonder who is actually running the country! (Pulls tinfoil hat over ears)
Correct me if I am wrong – but the other side of the ledger is overseas debt or foreign investment – both of which expect a return of either interest or dividend.
Other than property – what else is left to sell off??
Western Australia.
Alex Nice suggestion
Not sure how much of it is left? Rio must be a large part of it and even about 2 years ago we only owned 16% of that. I don’t have a clue what the latest numbers might be but you’d have to assume we now own less than back then.
Lol.
In trend terms, the trade balance improved.
Basically interest rates need to be higher to slow down imports which are the result of a high AUD and increased demand due to low RBA rates.
As long as property market speculators require ever increasing debt, higher interest rates on their own won’t help. It’s not the spending bit that is the real problem for the economy – it’s the borrowing bit.
Thats about the sum of it –
The govt and RBA know we need jobs
-We have no competitive industry apart from mining (generally)
-We have a service sector mainstayed by government spending from State governments suffering stamp duty withdrawal or a federal battle of surplus bullshido
The only jobs which can quickly be sparked up are those in a construction sector for a product which already ranks amongst the most expensive of its type in the world, and for a populace in debt to its eyeballs.
They need a widespread takeup of debt – from a nation wary of doing so
The answers lie back in time.
I’m more concerned about the lack of diversification. Exports share to China and from WA hit an all-time high. Iron ore’s share was also near the all-time high. We are increasingly a one-trick pony.
How exactly are we going to produce anything when we have some of the highest labour, land and electricity prices in the world?
Mining can succeed despite the high cost conditions. Other sectors cannot.
Not while we have low interest rates, there are still plenty of specuvestors wading into housing.
Maybe it’s time to get a bit more Gold or Silver!
http://www.smh.com.au/it-pro/business-it/memo-to-gillard-turbocharge-investment-in-ideas-20130306-2fl0y.html
No doubt this will fall on deaf ears.
The most positive comment that I can make is:
I read through all the comments but I didn’t find a single pundit even suggesting our CAD trend is acceptable.
That’s a huge improvement!
Maybe the message is getting out, maybe Joe Average Aussie actually wants to make tangible, worthwhile products. don’t worry I haven’t found marcoeconomic religion it’s just the beer talking.
(Nice drop actually Sam Adams Alpine Spring) have a great day everyone.
We’ll see how influential MB is by future sales of Sam Adams Alpine Spring!!!!!