Record trade surplus. New vehicle sales hit 2-year high

International trade; New vehicle sales; ANZ job ads

The trade surplus increased from $12.7 billion in July to a record $15.1 billion in August.

New vehicle sales totalled 83,312 units in September and 1,088,217 over the year – a 25-month high.

Job advertisements (as tracked by ANZ) fell by 2.8 per cent in September to be up 60.8 per cent on a year ago.

International trade – August

• Australia recorded its largest ever trade surplus in August, driven by rising commodity prices. The trade surplus increased from $12.7 billion in July to a record $15.1 billion in August. Australia has posted 44 successive monthly trade surpluses. The rolling annual surplus rose from $97.4 billion in the year to July to a record $109.8 billion in the year to August. Exports to Japan rose by 10 per cent in August to a record high $6.2 billion.

• Exports rose by 4.1 per cent in August. Rising coal (up 13 per cent) and LNG (up 16 per cent to record highs) export values more than offset a 4 per cent decline in iron ore export values, which continue to ease following a sharp fall in the price of the steel-making ingredient.

• Imports of goods and services fell by 1.5 per cent. Consumer imports lifted 4.3 per cent; capital goods imports fell 4 per cent and intermediate goods imports dropped by 6.5 per cent.

• Exports to China fell by 2.6 per cent from a record $19.1 billion in July to $18.6 billion in August. But Australia’s annual exports to China rose by 23.5 per cent to an all-time high of $180.3 billion in August, despite a range of Chinese trade restrictions being imposed on Aussie exports over the past year.

• That said, the recently announced multilateral security pact between the US, UK and Australia (‘AUKUS’) alongside a slowdown in China’s property sector could present risks to Chinese demand for Aussie exports in the near-term.

• Imports from China fell by 5.5 per cent to $6.8 billion in August. Australia’s annual imports from China rose from $86.6 billion in July to $86.7 billion in August (up 5.1 per cent). Australia’s rolling annual trade surplus with China rose from $87.2 billion in July to a record $93.6 billion in August.

New vehicle sales – September

• New vehicle sales totalled 83,312 units in September, up 20.8 per cent on a year ago. The increase occurred despite prolonged Covid-19 lockdowns and supply chain constraints amid a global chip shortage.

• Passenger car sales were up 4.6 per cent over the year to September; sales of sports utility vehicles (SUVs) lifted 25.1 per cent; light commercial vehicles were up 27 per cent; and heavy commercial vehicles were up 37.5 per cent on September 2020.

• According to the Federal Chamber of Automotive Industries, “Toyota was market leader in September, followed by Mazda and Ford. Toyota led Mazda with a margin of 13,661 vehicle sales and 16.4 market share points. The highest selling model was the Ford Ranger which recorded sales of 4,192. This was followed by the Toyota Hilux with 3,635 vehicles sold and the Toyota Corolla with 3,487.”

• In the 12 months to September, new vehicle sales totalled 1,088,217 – a 25-month high – to be up 21.4 per cent on a year ago. In the year to September, SUVs accounted for a record 70.5 per cent of combined SUV and passenger car sales.

Job advertisements – September

• With more than half of Australia’s population currently in lockdown and businesses shut, demand for labour continued to fall in September, especially in NSW and Victoria. According to ANZ, job advertisements fell by 2.8 per cent in September to 189,272 available positions. But vacancies are still up by 60.8 per cent on a year ago and 21.9 per cent higher than pre-pandemic levels.

• ANZ economists reported, “Underlying labour demand is still robust, despite lockdowns. Nationally, the proportion of businesses reporting vacancies was still almost double what it was pre-pandemic.”

• While job losses will likely increase in both NSW and Victoria in September, new NSW Premier Dominic Perrottet is set to ease restrictions next week with NSW’s 70 per cent double vaccination target fast approaching.

Published by Ryan Felsman, Senior Economist, CommSec