Falling AUD saves Aussie tourism

By Leith van Onselen

The Australian Bureau of Statistics (ABS) has released trade data for the month of February, with Australia recording a seasonally-adjusted trade deficit of $1,256 million. The result just beat analyst’s expectations, who had expected a trade deficit of only $1.3 billion.

It was the eleventh monthly trade deficit in a row and followed the $1,003 million deficit recorded in January (revised up from $980 million) and the $644 million deficit recorded in December (revised up from $503 million).

The next chart shows the monthly breakdown:

ScreenHunter_6878 Apr. 02 12.03

In seasonally adjusted terms, exports rose rose $282 million (1%) in February to $27,874 million, whereas imports rose $534 million (2%) to $29,129 million, driven by rising intermediate and other merchandise goods imports (up $284 million) and consumption goods rose (up $192 million).

Australia’s biggest export commodity – iron ore (20.9% share) – fell by $13 million in February in raw terms to $4,373 million. Australia’s second and third biggest export commodities – coal (14.6% share) and gas (7.5% share) – also fell by $279  million and $161 million respectively. By contrast, Australia’s fourth biggest export commodity – gold (6.4% share) rose by $93 million over the month in raw terms (see next chart).

ScreenHunter_6879 Apr. 02 12.22

Merchandise exports to China – Australia’s biggest market – rose by $100 million to $6,561 million in raw terms, with its share of total exports at 31.3%. By contrast, merchandise exports to our second, third and fourth biggest markets – Japan (17.0% share), Korea (6.7% share) and India (3.6% share) – fell by $191 million, $180 million and $5 million respectively (see next chart).

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As always, Western Australia dominated the nation’s merchandise exports. It alone accounted for a whopping 45% of Australia’s merchandise exports in February, although the state’s exports fell 2% to $9,343 million in raw terms (see below chart).

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Similarly, Western Australia continues to be the state driving the nation’s trade balance, although Queensland and South Australia are also paying their way. By contrast, the prime rent-seeking (banking & finance) states of Victoria and New South Wales remain heavily in deficit (see next chart).

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Australia’s services trade balance worsened slightly in February (-$67 million in seasonally-adjusted terms), with net tourism exports falling by $37 million:

ScreenHunter_6883 Apr. 02 12.31

Nevertheless, the falling Australian dollar has worked wonders for Australian tourism, engineering a big recovery over the past two years:

ScreenHunter_6884 Apr. 02 12.35

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