Australia’s trade balance worsened in October as iron ore exports, especially to China, fell.
At the same time, new home sales fell in October, but car sales surged in November to the highest level ever for the month at more than 98,000.
The trade deficit widened to $3.3 billion in October, following a deficit in September of $2.4 billion and forecasts for $2.6 billion.
Exports fell 3% in the month, while imports were flat, the Australian Bureau of Statistics said yesterday.
Shipments of non-rural goods, which include most of Australia’s main export commodities such as iron ore, coal, LNG, oil and metals, fell in the month.
Exports of rural goods, and services were also a but softer than expected.
The fall in iron ore export volumes was particularly evident in declining iron ore shipments in Port Headland.
Iron ore exports fell 3% to 36.4 million tonnes in October – with prices also falling around 10% over the month as well. Exports to China fell around 8% to 30.7 million tonnes from 33.7 million in September.
Iron ore export volumes will rise in coming months as Gina Rinehart’s Roy Hill mine ramps up shipments. But that won’t help the value of iron ore exports which will remain under pressure with prices at or just under $US40 a tonne for some months to come.
But LNG exports from Queensland and WA will start impacting export data next year, even at lower prices, and the trade deficit should start shrinking. But a factor to watch for is the impact of the El Nino and drought in Queensland which could cut rural shipments in 2016.
New home sales have slipped again, falling 3% in October, after September’s 4% drop. That is consistent with the cooling in the home construction boom, especially from investors.
Meanwhile car industry figures showed that new car sales topped 1 million in November to 1,055,792, up nearly 4% on the same period of 2014.
November’s 98,639 in sales was 6.9% above the same month last year (when 92,232 units were sold) and in fact the highest figure for the month so far recorded. In fact sales are heading for a record figure for the year, above 1.15 million units, on present indications.
Low petrol prices saw sports utility vehicles (SUV) continue their rapid 2015 growth with sales up 16.2% last month from November of last year.
Sales of passenger cars dropped 3.1% while demand for light commercial vehicles leapt 16% (the so-called tradies’ cars) and sales of heavy vehicles were up 8.7%, which was an encouraging figure.
