2019 shapes as a potentially volatile year for the $AUD and the domestic and international financial markets, according to financial observers. The growing downside risks in the global economy raise the question of whether the pace of our export growth will be sustained. This week the Bureau of Statistics released the latest figures showing a trade surplus.
Australia’s trade surplus lifted to AUD 3.68 billion in December 2018 (in seasonally adjusted terms), the highest level in two tears. But this was due to the fact that Imports dropped more than exports. Exports fell by 2% to AUD 37.92 billion, which was more than offset by Imports, which declined at a faster 6% to AUD 34.24 billion.
Exports of non-rural goods (the largest component by dollar value) fell by $173 million from a month earlier. Rural goods also declined by $34 million, a result likely reflecting the impact of Australia’s drought. Those declines were partially offset by an increase in the value of services exports which rose by $57 million.
The export figures revealed a sharp 60% increase in the very volatile “non-monetary gold” component, along with a 4% rise in iron ore sales propping up a 1% rise in exports. Coal exports fell by $543 million, while metal ores and minerals (iron ore) and other liquid fuels (LNG) showed increases of $317 million and $90 million respectively.
Services exports rose 1% in both trend and seasonally adjusted terms, with travel a key component of the gains as a lower Australian dollar lures tourists. Some detail within the import figures showed positive signs for the broader economy, with imports of capital goods (items used by businesses) rising almost 7% in November. Imports of consumption goods rose 2%, which may also help allay some of the worst fears about a household spending downturn.
