Yes Australia had yet another trade deficit in February.
The deficit was steady compared to January as the benefits of the resource boom continued to be seen in the export performance, despite the rising dollar.
In seasonally adjusted terms it totalled $838 million in February against a downwardly revised $832 million for January, in figures from the Australian Bureau of Statistics (ABS).
That means the trade deficit has been under $900 million for three of the past four months (excluding the blow out in December).
The ABS said that exports in February were up 2.1 per cent in adjusted terms, while imports rose by around a similar amount.
On the face of it another ‘ho-hum’ month but dig down into the figures there are some interesting trends.
From December to February exports rose just over $700 million while imports only rose a little more than $120 million.
But look at the figures based on the actual dollar (the ‘original terms’) and not the seasonally adjusted figures and there’s a different story: exports are surging, but so, unfortunately, are imports
The ABS reported that “in original terms, the February 2007 balance on goods and services was a deficit of $208m, a decrease of $1,921m on the revised deficit in January. Goods and services credits rose $775m (5%) while goods and services debits fell $1,146m (6%).
“In the eight months to February, exports of non-rural and other goods were up $13.1b (16%) and rural goods were up $0.7b (4%) on the corresponding period in 2005-06.”
The original figures show that the surge in imports is happening and booming, despite the impact of the drought with only a $700 million rise in the value of rural exports in eight months.
That $13 billion increase in the value of non rural exports of goods and services in original terms hints at the combination of volume increases and price rises working together for products like iron, ore, oil and gas, coal, nickel and copper.
That saw exports rise from $97.759 billion in the first eight months of 2005-06 to $111.559 billion for the same period of 2006-07.
With imports rising a bit more slowly from $108.56 billion to $119.724 billion, the trade deficit almost halved, from $15.04 billion to $8.166 billion in the first eight months of the current financial year.
And that’s good news.
A look at where the increase in exports is occurring confirms the feeling: WA lifted exports by more than $9 billion in the first eight months of 2006-07.
The major destinations for imports were NSW, up $4.2 billion (understandable given the size and importance of Sydney as a port and Sydney Airport as well) and WA where imports rose $3.3 billion and would be mostly capital equipment for the expanding resource sector.
Major exports were up with the exception of coal which fell by around $1.3 billion in value. Metals and ore exports rose $5.6 billion in the eight months to February, other minerals and fuels were $1.5 billion higher while exports of metals (excluding non-metallic gold) rose 42.9 billion.
The ABS said that in February ” In seasonally adjusted terms, the balance on goods and services was a deficit of $838m in February, an increase of $6m on the revised deficit in January.
“Goods and services credits rose $388m (2%) to $18,546m. Non-rural and other goods rose $357m (3%) and rural goods rose $24m (1%). Services credits rose $7m.
“Goods and services debits rose $394m (2%) to $19,385m. Consumption goods rose $227 (5%), capital goods rose $101m (3%) and intermediate and other goods rose $72m (1%). Services debits fell $5m.
