Australia: Trade surplus surged to $825mn in February - Westpac

Andrew Hanlan, Research Analyst at Westpac, explains that Australia's trade balance has improved early in 2018, with back-to-back surpluses, after a deteriorating in Q4 when export shipments recorded a surprise contraction.

Key Quotes

“Export prices lifted in Q1 and both export shipments and import volumes are advancing, we assess.”

“In February, the trade surplus was $825mn, largely as expected (market median $725mn and Westpac $500mn).”

“This was little changed from January, a surplus of $952mn, revised from an originally reported +$1,055mn.”

“Imports were little changed in February, edging 0.4% higher.”

“Export earnings were unchanged in the month, a more resilient outcome than anticipated. While gold exports did pull-back, largely reversing a January spike associated with Lunar New Year, this was offset by a lift in rural goods.”

“For Q1, the improved trade position to date points to the potential for net exports to be relatively neutral for growth in the period, a marked improvement on the Q4 outcome.”