Trade Surplus

Australia’s international trade balance recorded a surplus of $1.888bn, down from a surplus of $3.44bn in June (revised down slightly) and below the bottom of the market forecast range ($1.9bn to $4.0bn), so disappointing.

The positive trend in the surplus remains intact however despite yesterday's result The trend series surplus rising from $2.2bn in June to $2.4bn in July. The July surplus is not far below the average monthly surplus for the June quarter of $2.2bn ($1.6bn for the first two months). The dip in export prices for mining products reversed in August, with a substantial rebound in base metals prices and in iron ore prices (the latter now 20% above its July low). And the Super Hornet (Airforce jets) imports are likely to be a one-off. Consequently, expectations are for another positive contribution to GDP growth in Q3 from the trade accounts.