Trade deficit improves

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By Leith van Onselen

The Australian Bureau of Statistics (ABS) has just released trade data for the month of February, with Australia’s trade deficit decreasing to a seasonally-adjusted $178 million, from $1,215 million in January (revised upwards from $1,057 million). Analysts had expected the deficit to narrow to $1 billion.

It was the 14th consecutive month that Australia has recorded a monthly trade deficit (see below chart).

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In seasonally adjusted terms, exports rose $811m (3%) to $25,642m. The increase in exports was assisted by a $226m (1%) fall in imports to $25,820m.

Australia’s two major export commodities – iron ore (25% share) and coal (15% share) – fell by -$30 million and -$283 million respectively. Gas exports (6% share) also fell (-$63 million), as did Australia’s third biggest export – gold (7% share), which fell by -$55 million over the month (see below chart).

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Exports to China were flat over the month, with its share of total exports falling slightly to 33%. Exports to the three other major markets – Japan (+$53 million), Korea (-$93 million) and India (+$80 million) – also showed only moderate movement (see below chart).

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Western Australia continues to dominate the nation’s exports. It alone accounted for 48% of Australia’s merchandise exports in February, despite exports falling by -3% over the month. By comparison, exports from Queensland rebounded by 6%, after crashing last month (see below chart).

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Western Australia also continues to be the only state with a meaningful trade surplus:

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Finally, Australia’s services trade balance improved marginally in February (+$23 million), and has essentially stabilised over the past six months after a horror run since late-2008 on account of the high Australian dollar (see below charts).

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Comments

  1. Blimey! Bloody bewdy! Everything’s OK then!

    Sorry UE I can’t help myself. I know YOU mean well.
    We run a bit less of a Trade deficit and it’s headlines. Current Account data comes out, permanently massively negative, and it’s not even heard of. The net effect is the average bod thinks we are a rip roaring productive debt-free booming economy.
    Nuts!

    • GunnamattaMEMBER

      You are being a doomer there flawse.

      I see we get a few more positive monthly trade balances and then submerge for another dive into endless waters of endless negative balances.

      A nice head and shoulders pattern if only you get the other shoulder.

      • Doomer maybe….but after watching 50 years of this crap I’m bloody tired of it.
        MSM ought pull the wool over there own eyes!

        The trade deficit doesn’t natter. It’s just a set of stats. The CAD MATTERS because that is real debt!

  2. So if the trade deficit “improved” – which went the other direction? Private Savings or the budget?

    • Wait for the CAD and see where the money went there. Trade deficit is a minor part of our external ‘deficit’

      • I don’t know if I would call it minor but yes NPI & NSI contribute to make the CAD.

        And Yay someone finally replied to a comment of mine here & it wasn’t a political argument.

  3. It really is a new era of Globalization that we are entering.

    On the one hand Australia is willingly surrendering any hope it has of ever leveraging its primary industry wealth to move up the manufacturing chain

    At the same time China is completely reliant on a tiny country (Australia) to deliver essential materials like Iron ore and coal.

    If history has any lessons to teach us, it is surely that planning 100% on the reliance and cooperation of foreign nations is guaranteed to end badly.

    What would Australia be like if China decided we dont all need new cars and set a limit of 1 new car per family per 20 year period. Sounds silly but at some time in the future, when resources need to be rationed who will decide how they are rationed?

    A war (a real war) raises all kinds of logistic issues when the enemy occupies a vital role in your supply chain.

    It seems to me that Australians are going to learn some serious lessons during the next 20 years!

    Where was it that I signed-up for those Mandarin lessons again…bu zhi dao