As per the official data released by the Australian Bureau of Statistics today, Australia has recorded a lower than expected trade surplus of $1.925 billion in the month of November 2018. The October’s figures were also modified down from posted initially $2.316 billion to $2.013 billion.
The monthly trade surplus figures stood below market median expectation. The analysts were anticipating a trade surplus of $2.175 billion, slightly lower than October’s original result of $2.3 billion.
The 4.4% month-on-month decline in trade surplus signifies imports were rising faster than exports. The nation’s imports rose by 1.7% while the exports rose by 1%, after seasonal adjustments.
The biggest drag was a 9% dip in overseas sales of coal, coke and briquettes. Exports of non-rural goods, constituting the most significant contributor to trade by dollar value, declined by $173 million as compared to the previous month. Driven by the nation’s drought situation, exports of rural goods also fell by $34 million.
However, it is worth noting that The Bureau reported a 60% jump in the very volatile "non-monetary gold" component. The gold exports surged by $681 million in November as compared to the previous month. The service sector exports were reported to increase by 1% in both trend and seasonally adjusted terms, attributable to tourism spurt on account of the lower Australian dollar. The value of service exports rose by $57 million with tourism exports contributing $43 million.
It is to be noted that the Australian economy increased its imports of industrial capital goods by 6.5%. The civil aircraft’s imports accounted for $368 million of this $433 million increase in capital goods import.
Even the consumer goods reported a 2% increase in imports shutting down the market’s negative sentiment regarding a dip in household disposable income and spending. The Non-industrial transport equipment imports accounted for $140 million of this $202 million increase in consumer goods import.
The ABS data depicted $145 million drops in imports of fuel and lubricants, despite a sharp fall in global crude oil price.
Despite the disappointing announcement by the nation’s official Bureau, the benchmark index S&P ASX 200 ended 0.7% higher at AUD 5722.4, up from the previous close of AUD 5683.2. The broader All Ordinaries index closed at AUD 5744.5, up by 38.8 points. The market sentiment is still positive on account of positive US jobs data released by Fed yesterday. As per official data from US Labour Department, The US economy created 312k new jobs in December 2018 as compared to the market expectation of 176k.
Economists are keeping a close eye on the critical disturbances in global macroeconomic factors. Factors such as the growing trade tension between global giants US and China, sluggish Chinese economic growth, fluctuating global crude oil price and uncertain European Brexit are likely to have a cascading impact on Australia’s current account balance and Balance of Payments.
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