As Australian Balance of Trade figures were released this week, the main media attention has been on the upswing in exports of coal and LNG. But there were other noteworthy contributors to the positive result. Rural goods also enjoyed stronger performance, up 3% to $4.2 billion (with the bulk of the lift coming from cereal shipments), while exports of non-monetary gold rose 3% to $1.52 billion. Tourism rose 2% to $4.3 billion and exports of services went up 1% to $6.39 billion, mainly due to a 2% increase in travel.
The figure came in above market expectations, as exports strongly bounced back after the disruptions of Cyclone Debbie last month, reducing coal supplies. It was the seventh straight month of trade surplus and the largest since February 2017, as exports jumped 9% month-on-month to $32.78 billion.
The import side of the ledger was more stable as the value of consumption goods arriving rose by 1% to $30.31 billion, despite falls in food and electrical goods imports. Capital goods imports fell 5 per cent, largely due to a drop in the delivery of civil aircraft.
The unwind of earlier commodity price gains is ongoing, making the terms of trade a drag in coming reports. LNG output is scheduled to skyrocket as projects are finished and contract delivery is finalized. Volatility in the trade balance is expected to continue as it is buffeted by multiple forces over the next couple of years. But this should not distract from the perspective of the broader economy’s performance, given the sector keeps shrinking its local cost base, and as swings in trade profits will be offset by repatriation of profits to foreign owners.
