Mining exports lift trade surplus in Aug

Australia's trade surplus improved to $989 million in August, helped by higher mineral exports.

Australia's trade balance recovered in August, helped by a lift in mining exports even as imports remained steady.

The trade surplus rose to $989 million in the month, up from a revised $808 million surplus in July, seasonally adjusted data from the Australian Bureau of Statistics showed.

The August surplus was higher than the $850 million that economists had been expecting.

The gains were primarily on the back of higher mineral shipments, which helped bump up overall exports by $166 million, or one per cent.

The boost was the result of a stronger than expected upturn in nominal iron ore exports, which spiked 10 per cent over the month, JP Morgan economist Tom Kennedy said.

"While still early days in the tracking process, the weakness in export prices suggest most of the uplift in the trade reports so far through the third quarter is being driven by stronger volumes growth," Mr Kennedy said on Thursday.

The trade balance has been in surplus for much of the past year, helped by a rebound in iron ore prices and rising natural gas exports.

Economists expect the momentum to continue as production from LNG projects continues to ramp up and iron ore prices remain above the $US50 a tonne level.

Imports remained largely steady in August, down just $15 million for the month, as an increase in services imports offset a decline in in capital and consumption goods.

"The weakness in consumption goods imports is consistent with the recent slump in the monthly retail sales reports," Mr Kennedy said.

Seasonally adjusted retail spending slipped 0.6 per cent in August, the sharpest fall in more than four years, Australian Bureau of Statistics data showed on Thursday.

The trade performance has been underwhelming so far in the September quarter, belying expectations that higher average commodity prices would boost exports, Westpac economist Andrew Hanlan said.

"To date, export volumes appear to be disappointing, dented by some one-off disruptions, particularly in the resources sector," Mr Hanlan said.

"Pending a late flurry of exports in September month, there is the risk that real net exports are flat to a negative in the September quarter, rather than being the positive for growth that we have factored into our Q3 GDP forecast."


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Source: AAP



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