The Australian Bureau of Statistics (ABS) has just released trade data for the month of April, with Australia recording a seasonally-adjusted trade surplus of $28 million. The result disappointed analyst expectations, which had expected a trade surplus of $200 million.
It was the third consecutive monthly surplus and follows the $555 million surplus recorded in March (revised up from $307 million) and the $203 million surplus recorded in February (revised up from a deficit of $111 million):
In seasonally adjusted terms, exports fell $302 million (-1%) to $25,419 million. The decline in exports supplemented by a by an $225 million (1%) increase in imports to $25,391 million, mostly on the back of higher capital goods (+$733 million).
Australia’s two major export commodities – iron ore (27.3% share) and coal (14.4% share) – rose by $72 million and $119 million respectively. By contrast, Australia’s third biggest export – gas – (5.6% share) fell by $120 million, whereas Australia’s fourth biggest export – gold (5.5% share) – rose by $30 million over the month (see below chart).
Exports to China rose by $9 million over the month to a record $7,390 million, with its share of total exports also hitting a record high of 35.4%. Exports to the the next two biggest markets – Japan (17.6% share) and Korea (7.1% share) fell by $186 million each, whereas exports to Australia’s fourth biggest market – India (4.5% share) – rose by $133 million (see below chart).
As always, Western Australia dominated the nation’s exports. It alone accounted for 50% of Australia’s merchandise exports in April, although exports fell by 2% over the month. By contrast, exports from Queensland rose by another 2%, continuing its recovery after crashing in January (see below chart).
Again, Western Australia continues to be the only state with a meaningful trade surplus, although South Australia and Queensland are also pulling their weight:
Finally, Australia’s services trade balance worsened materially in April (-$141 million) on the back of lower tourism exports and higher tourism imports (see below chart).
Overall, the recent recovery in Australia’s trade balance reflects both higher export volumes as well as the recovery in commodity prices over the first quarter. With commodity prices falling significantly over the past month or so, there’s a strong likelihood that the trade balance will again shift into deficit.
