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Exports To China Recovering


The Australian trade surplus for October narrowed slightly to A$12217mn from A$12444mn the previous month but remained elevated. Exports of goods & services fell 0.9% and imports -0.7%, which was softer than expected, but are up 38.4% y/y and 43.8% y/y respectively, which may be close to the peak.

  • Exports to China continue to recover rising 33.4% y/y in October after 17.2% last month (the data is nsa). Exports to other major destinations remain strong, especially to Japan +85% y/y. (see chart below)
  • The weakness in imports was driven by fuel and lubricants which fell 7.1% m/m. Consumer goods imports rose 1.2% m/m driven by vehicles +16.9% as supply-chain issues ease. Tourism imports posted another solid rise up 1.5%, as people travel abroad post Covid. Capital goods were down 1.7% due to a sharp drop in the other component but machinery & equipment rose 3.7%, which is positive for the investment outlook.
  • The fall in exports was driven by a 20.5% drop in non-monetary gold (overall exports to India were down 37.8% y/y). But rural exports rose 1.7% whereas non-rural fell 0.5% driven by metal ores & minerals down 2%. Services exports rose 0.4% despite a 0.3% drop in the tourism component.
Trade in goods & services y/y%

Source: MNI - Market News/Refinitiv/ABS

Australian exports to Asia y/y%

Source: MNI - Market News/ABS

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