Australia’s trade surplus has fallen to $1.3bn for January 2017, a drop of almost two-thirds from December 2016’s significant $3.3bn surplus.
This surprising decline defied the expectations of many market experts, who had predicted further growth in the surplus following the record-breaking surplus recorded for December 2016.
However, economists have been quick to address the situation, stating that the slump will be short-lived.
“We are likely to continue to see decent trade surpluses for the time being with commodity prices still around 45% above their most recent lows in late 2015,” said CommBank economist Kristina Clifton. “And there is a further lift in export volumes to come when the LNG [liquefied natural gas] plants reach peak output in 2018.”
This dramatic turnaround in the surplus comes in the shape of a 3% fall in exports, coinciding with a 4% rise in imports over the month of January.
The fall in exports is being put down largely to a 39% ($671m) drop in exports of non-monetary gold. However, this is a notoriously volatile market which is likely to rebound quickly. National Australia Bank economic director David de Garis noted that weather is affecting output at the Telfer gold mine in Western Australia, suggesting that the weather could be behind similar, but less dramatic, declines in coal exports.
“It’s conceivable that weather could have also adversely affected iron ore in January,” Mr de Garis said. “That’s quite usual at this time of year when northern monsoons often interrupt activity.”
The large-scale spending over the Christmas period has also been touted as a factor in the trade surplus swing, as retailers increased consumer goods imports by 7% to cater to seasonal demand.
Australia has had a history of recording trade deficits in recent decades, so the fact that this slump has caused alarm is being considered a positive sign for an Australian economy striving for greater self-sufficiency and productivity.