The slide in global commodity prices crunched Australia’s trade account in December and the 2015 calendar year, according to Bureau of Statistics figures issued yesterday.
The December trade deficit was one of the highest on record, our export performance was one of the worst in the past five years as the slow down in China, falling prices for commodities such as iron ore, coal, metals and oil and gas, hit hard.
In fact the $32.7 billion trade deficit in calendar 2015 was a new record, according to Bureau of Statistics data going back to 1971.
Australia’s trade deficit blew out to a six-month high of $3.5 billion in December thanks to the slide in prices for the country’s key resource exports such as iron ore, coal, LNG and metals and solid imports.
In fact exports fell 4.7%, but imports were down only 1.5% in December (not much an impact on imports from the fall in oil and petrol imports).
The trade deficit was $1 billion more than the market estimate and $800 million worse than the deficit in November, and $300 million higher than October’s figure.
In fact the $3.5 billion deficit was the 4th largest on record. For the December quarter, trade deficits totalled $9.5 billion, up 27% or $2 billion from the $7.5 billion recorded in the September quarter.
The value of iron ore and mineral exports fell 16% in December, while coal fell 8%. Exports of rural goods fell by $392 million (down 9%) but the value of wheat and cereal shipments was up 15%.
And the ABS data showed that value of goods exported in December was the among the lowest in almost five years.
At $25.24 billion, the value of exports was the lowest since May last year, and before that February 2013.
Trade deficit fourth worst on record
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Earlier this week the Reserve Bank released its commodity price index for January, which showed a fall of 15% in the year to the end of January.
And trade price data last week suggested our terms of trade fell 5% in December and more than 20% over the year.
The one bright spot was service exports, which climbed to record highs as more tourists were lured to Australia because of the cheaper Aussie dollar.
In all, travel exports jumped 15% in December from the same month in 2014, as the impact of the cheaper dollar attracted more tourists from overseas.
In other news from the economy yesterday, building approvals recovered in December, while car sales started 2016 strongly.
The Bureau of Statistics showed approvals to build new dwellings rose 9.2% in December (seasonally adjusted) recovering from a revised 12.4% slide (previously a fall of 12.7%) in November, which was the biggest in almost three-and-a-half years.
That was driven by a 23% drop in approvals for home units and other non private homes in November, which improved to a 12% plus rise in December.
Approvals for new private homes were up a seasonally adjusted 5.4% in December, more than reversing November’s 0.5% dip.
The December rise was more than double the 4.2% pace expected by economists, and saw the annual rate dip 2.5%, an improvement on the revised -7.6% fall (previously an 8.4% drop) in the 12 months to November. The building approvals data remain a highly volatile series (especially on a seasonally adjusted basis). The ABS said that on a trend basis, total approvals fell 0.1% in November, with approvals for private sector dwellings, excluding houses, fell 0.1% and approvals for private sector houses rose 0.1%.
And car industry figures released yesterday showed new car sales started strongly in 2016. A total of 84,373 new passenger cars, SUVs and commercial vehicles were bought in last month, up 2.7% from the same month in 2015.
Toyota was the top selling brand in January 2016 with 14.8% of the market, followed by Mazda with 11.9%, Hyundai with 8.3%, Holden with 8.1% and Nissan with 6.6%.
