Golden hammer bashes trade suplus

The ABS September trade figures are out and show a $400 million hit to the surplus:

SEPTEMBER KEY POINTS
BALANCE ON GOODS AND SERVICES
The trend estimate of the balance on goods and services was a surplus of $2,718m in September 2011, a rise of $122m on the surplus in August 2011. In seasonally adjusted terms, the balance on goods and services was a surplus of $2,564m in September 2011, a fall of $389m on the surplus in August 2011.

CREDITS (EXPORTS OF GOODS & SERVICES)
In seasonally adjusted terms, goods and services credits fell $712m (3%) to $27,325m. Non-monetary gold fell $411m (24%) and non-rural goods fell $295m (2%). Rural goods rose $45m (2%) and net exports of goods under merchanting rose $1m (25%). Services credits fell $52m (1%).

DEBITS (IMPORTS OF GOODS & SERVICES)
In seasonally adjusted terms, goods and services debits fell $323m (1%) to $24,761m. Intermediate and other merchandise goods fell $460m (5%) and consumption goods fell $155m (3%). Capital goods rose $302m (6%) and non-monetary gold rose $39m (7%). Services debits fell $47m (1%).

Here’s the chart that matters. Iron ore only came off a smidgen and coal was flat. Most of the damage was done by gold (remember the big correction, called here!):

So, we can look forward to remarkably worse figures ahead. Indeed by early next year I expect a deficit.

But it was not all bad news. The dollar of course weakened in September and the results appear to be an almost instant bounce in manufacturing exports:

Not exactly nirvana but nonetheless encouraging that the production is still there to bounce when the dollar falls, at least that is, if Canberra doesn’t kill it before the fall happens permanently.

David Llewellyn-Smith

Comments

  1. Your title soooooo deserves a song along the lines of “Maxwell’s Silver Hammer” … I don’t have the imagination but I’m sure someone else will 🙂

  2. Slightly off topic here but does the savings rate of 10% include superannuation?
    Because I know quite a few people including myself who have switched their super into 100% cash.
    10% seems awfully high for pretty much all the people I know, so I thought this might have something to do with it.
    If anyone can answer that question for me it would be appreciated.
    If the savings rate does include super, I don’t think the savings rate is relevant because we can’t access our supertill we retire.