Aussie trade surplus for goods hits two year low

The trade surplus for goods has dipped to its lowest point in two years. This is why.

Australia’s trade surplus for goods has dipped to its lowest level in two years, after China bought less local goods.

The goods trade surplus was just under $2 billion for November, down from $4.7 billion in October, based on Australian Bureau of Statistics figures released on Wednesday.

It was the first time since November 2018 the goods trade surplus fell below $2 billion, ABS head of international statistics Branko Vitas said.

“An 11 per cent increase in imports and a small increase in exports has more than halved the goods trade surplus this month,” Mr Vitas said.

The change in the surplus was affected by a $1.218 million (10 per cent) drop in exports to China, combined with an $889 million (11 per cent) jump in Chinese imports.

Total exports increased 1 per cent in November, driven by higher exports of non-monetary gold, mostly to Singapore, and gas.

“It’s not unusual to see large non-monetary gold exports to Singapore, especially since 2012 when Singapore removed the GST from investment-grade precious metals,” Mr Vitas added.

The surplus was also buffered by increases in exports of gold coin and oil seeds, as the export season for canola started getting off the ground.

However there were big declines in iron ore, which fell $851 million or 8 per cent, after a record high in October.

Coal exports also dipped $254 million, or eight per cent.

Meanwhile, imports jumped 11 per cent to $28.6 billion, the fifth highest monthly imports value on record.

It was driven by transport equipment, almost all being aircraft from the United States, Mr Vitas said.

Telecommunications and sound equipment — mostly mobile phones from China — also drove the higher imports value, along with road vehicles.

Road vehicle imports have gained strength in recent months from lower trade earlier in the year due to COVID-19.

Originally published as Aussie trade surplus for goods hits two year low