Australia records record trade surplus in January
Australia’s trade account was in surplus for the 37th consecutive month in January, underpinned by surging iron ore exports.
Australia’s trade surplus jumped to $10.1bn in January, an increase of $3bn in the month as iron ore sales surged again to underpin another record result.
Exports climbed 6.2 per cent to $39.8bn, led by a 14.2 per cent increase in earnings from the sale of the steelmaking commodity, according to seasonally adjusted figures from the Australian Bureau of Statistics.
Further widening the surplus was a 2 per cent decline in imports to $29.7bn.
The January surplus was $500m larger than the previous record in March 2020. Australia’s trade account has now been in surplus for 37 consecutive months.
Imports declined after December’s big boost to consumption — which lifted demand for imported goods — eased in January. There was a 10 per cent drop in imported toys and books, and a 14 per cent decline in clothes.
Household electrical goods imports lifted by 11 per cent in the month to be 44 per cent higher than a year earlier, reflecting the impact of spending patterns as many Australians continue to work from home.
CBA economist Belinda Allen said she expected large trade surpluses to continue through 2021, averaging $7bn a month, as the global economic recovery supported commodity prices, even as Chinese demand for our key exports wanes over the back half of the year.
The surge in exports has been a merchandise trade story, as services exports have collapsed by 40 per cent over the past year to under $5bn in January as the closure of international borders decimated tourism and international student earnings.
International goods sales, in contrast, were 14 per cent higher than 12 months before at $34.9bn in January.
The Reserve Bank’s commodity price index lifted 3 per cent last month, which suggests February should record another strong trade result, ANZ economist Hayden Dimes said.
The booming terms of trade have boosted real national income, the national accounts’ best measure of living standards.