Trade Surplus Tops Expectations

By Glenn Dyer | More Articles by Glenn Dyer

Australia’s trade surplus hit a record $21.1 billion in the three months to September, according to data released on Thursday by the Australian Bureau of Statistics.

That is more than the previous record of $18.592 billion in the three months to June this year and is more than three times the $6.44 billion for the three months to September 30, 2018

Australia’s trade surplus rose to $7.18 billion in September, from an upwardly revised $6.62 billion in August and $7.316 billion in July.

Imports and exports were both up 3.0% in September.

The outcome was well above the $5.1 billion forecasts from the market.

Economists say the solid trade surplus, especially for September means the contributions from net exports to September quarter growth might be better than previously expected.

“Our preliminary calculations suggest [net exports] will be a small positive for growth in the September quarter, in the order of 0.1 to 0.2 percentage points (ppt),” Westpac senior economist Andrew Hanlan said in a note. “This represents a small upside surprise relative to our expectation for a flat result.”

Mr. Hanlan said initial estimates suggest export volumes grew faster than imports during the quarter, something that will boost trade’s contribution to third-quarter GDP (GDP is measured in volume terms, rather than nominal terms).

That will be smaller than the 0.6 percentage point contribution in the June quarter, but around the 0.2 percentage point contribution in the March quarter.

Economists at the Commonwealth also expect that net exports will make no contribution to September quarter economic growth.

But at 0.2 of a percentage point, it will only offset the 0.2 of a percentage point fall in retail sales volumes in the quarter.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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