The Australian Bureau of Statistics (ABS) has released trade data for the month of May, with Australia recording a seasonally-adjusted trade surplus of $670 million. The result beat analyst expectations, which had expected a trade surplus of $53 million.
It was the fourth consecutive monthly surplus and follows the $171 million surplus recorded in April (revised up from $28 million) and the $508 million surplus recorded in March (revised down from $555 million):
In seasonally adjusted terms, exports rose $914m (4%) to $26,444 million. The rise in exports was partly offset by a $414m (2%) increase in imports to $25,774 million, mostly on the back of higher consumption goods (+$357 million).
Australia’s two major export commodities – iron ore (26% share) and coal (15% share) – rose by $198 million and $264 million respectively in May. Australia’s third and fourth biggest exports – gold (6% share) and natural gas (5% share) also rose by $193 million and $40 million respectively over the month (see below chart).
Exports to China rose by $718 million over the month to a record $8,104 million, with its share of total exports also hitting a record high of 35.6%. Exports to the the next three biggest markets – Japan (18.2% share), Korea (7.3% share), and India (4.8% share) – also rose by $517 million, $177 million, and $141 million respectively over the month (see below chart).
As always, Western Australia dominated the nation’s exports. It alone accounted for 48% of Australia’s merchandise exports in May, rising by 5% over the month. Exports from Queensland also rose by 17%, continuing its recovery after crashing in January (see below chart).
Again, Western Australia continues to be the state driving the nation’s trade surplus, although Queensland and South Australia are also in the black:
Finally, Australia’s services trade balance improved in May (+$29 million) on the back of higher tourism exports and lower tourism imports (see below chart).
Overall, it is a strong result, which shows there is still some life in the China-led commodities boom. It will be interesting to see what impact the recent fall in iron ore and coal prices has on Australia’s trade balance once they are reflected in quarterly contract prices.
