Australia’s trade deficit was slightly lower than expected in November, driven by a fall in imports as consumption goods proved resilient and China’s appetite for mineral resources continued to boost the local commodities sector.
The balance of goods and services was a deficit of $1.70 billion in November, seasonally adjusted, from a revised deficit of $2.080 billion in October, figures released by the Australian Bureau of Statistics today show.
It was smaller than the market forecast of a deficit of $1.8 billion for the month.During the month, exports were down 2.0 per cent in adjusted terms, while imports fell 3.0 per cent.
Commonwealth Bank senior economist Michael Workman said the international trade numbers had remained ‘‘reasonably good’’ thanks to China’s continued demand for local commodities.
‘‘It was a bit better than expected,’’ Mr Workman said. ‘‘It is symptomatic of why Australia has fared so well over the last year and a half.
‘‘Our level of exports have stayed relatively high because China’s purchase of exports is for their domestic economy needs, rather than their export sector needs.’’
Commonwealth Bank says the 3 per cent drop in imports expenditure to $20.7 billion was the key driver of the improvement in the Australian trade balance.
The main contributors to the fall in imports in November were an eight per cent decline in the import of capital goods and a 34 per cent fall in non-monetary gold.
Exports of coal fell 5 per cent in November, while sales of metals were down 14 per cent.
JP Morgan economist Helen Kevans said while imports fell ‘‘significantly,’’ imports of consumption goods ‘‘proved resilient’’ over November, with firms stocking up in anticipation of buoyant Christmas sales.
‘‘This is somewhat surprising given that evidence was mounting in November that the RBA would be withdrawing policy support at a more rapid rate than expected,’’ Ms Kevans said.
National Australia Bank chief economist Robert Henderson said the result was ‘‘trivially different’’ from the market forecast of a $1.8 billion deficit.
‘‘It was driven by a fall in imports of 3 per cent which offset a fall in exports.’’
Running against the grain of the falling import figures was a $12 million (0.2 per cent) increase in imported consumer goods.
‘‘It was only small, but nevertheless it was running against the general trend and seems to suggest consumers are finishing the year on a high note.’’
Meanwhile ANZ senior economist Julie Toth said news of the nation’s export performance was less positive.
She said the outlook for 2010 remained extremely favourable and predicted the trade deficit would be ‘‘entrenched,’’ at least through the first half of 2010.
'‘A domestic economy in an advanced state of recovery and a strong Australian dollar will encourage import growth, whereas export demand, especially from advanced nations, will remain relatively soft,’’ Ms Toth said.
The second half of 2010 should bring better news as demand for exports generally improved, with continued improvements in commodity prices, she said.
AAP