Australia: Trade balance data disappoints led by rise in imports - Westpac

Andrew Hanlan, Senior Economist at Westpac, explains that in March, the Australian trade surplus printed at $3.1bn, some $550mn below the $3.7bn outcome for February and the result fell short of expectations, market median $3.3bn and Westpac $4.0bn.

Key Quotes

“Import volatility was again a factor. The import bill rose 4.6% in the month (+$1.3bn), after a 4.7% fall in February and a 3.4% rise in January.”

“Strength in January and the dip in February we put down to a pull-forward of import deliveries ahead of disruptions following Lunar New Year, which fell on January 28 this year.”

“In March, a 22% jump in fuel imports, $0.5bn, was notable. Consumption goods imports were also up strongly, reversing weakness in February.”

“Export earnings advanced by 2.4% in the month, +$0.8bn. Strength was evident in gold, metal ores and rural goods, with a partial offset from a fall in coal earnings.”

“For the March quarter, the trade surplus was $9.0bn. While this is a rise of $3.0bn on the December quarter, we had expected a more marked improvement given the sharp lift in commodity prices.”

“Our initial calculations suggest that real net exports were a negative in the March quarter, whereas we had anticipated a neutral impact.”