Australian Q4 GDP calculus starts poorly with trade

Still very early for December QTR GDP calculus but a poor start is worth noting, via Westpac:


Imports: rose by 1.7%, +$0.6bn (vs forecast -2.1%).

Exports: advanced by 1.4%, +$0.5bn (vs forecast -2.6%).

Additional detail

The main surprise – on both the import and export side – was the resilience of fuel despite the sharp fall in global energy prices. The upshot, both imports and exports advanced rather than declining as we anticipated.

Import strength: capital goods +6.5%, $433mn; consumption goods +2.3%, $202mn;

Export strength: gold, +$681mn (off a low base); metal ores, +$317mn

Export weakness: coal, -$543mn, as expected, on lower volumes.


For the December quarter to date, the trade figures have been a little disappointing, with the surplus running at a monthly average of $2.0bn. This is down from a $2.2bn average in the September quarter.

On our preliminary figuring, the terms of trade increaased modestly in the December quarter, supported by higher commodity prices. This will tend to underpin an improvement in the trade balance.

By implication, net exports appear to be running as a modest negative (to date) in the quarter, whereas we were expecting a broadly neutral result. We look to the final month of the quarter to turn this it around.

China’s thermal coal ban is not going to deliver that, as previously noted.

David Llewellyn-Smith
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  1. As imports crater the surplus will strengthen but imports are jobs so as with all of the emergent woes, there is no easy escape.

    • Jobs are already down. Many imports end up working for the government.
      According to the ABS “In 2018, public sector employment increased by 304,500 jobs, whereas private sector employment contracted by 92,700 jobs.

      • Great stat Randal, thanks. We live in a world where deception is Paramount, but it’s close to it’s useby date me thinks