Exports hit hard

WA’S exports, dominated by commodities, were hit harder than exports from other parts of Australia during August, according to the latest Australian Bureau of Statistics figures.

While Australian exports slipped back only 0.5 per cent in August, WA exports fell sharply, to $2.58 billion, a 7.6 per cent decrease. In annual terms, however, exports were still 8 per cent higher than in August 2000.

A drop in imports of 10 per cent for August compared with the corresponding month last year resulted in an improved trade balance of 16.4 per cent for WA.

Merchandise imports fell 30 per cent in the past three months.

Australia posted a monthly trade surplus in August of $33 million in seasonally adjusted terms, well above market expectations of $25 million.

The August trade result marks the seventh surplus in a row and the ninth surplus outcome in the past 12 months.

“We are coming to the end of this atypical period in our trading history, when the twin themes of a weak Australian dollar and soft domestic demand drove a substantial improvement in the external accounts,” Westpac economist Huw McKay said.

“In 2002 a firming Australian dollar and a resurgent domestic economy will combine to chart a reverse course for Australian trade, and monthly deficits will again be the norm.

“Supply factors across a number of sectors (eg rural drought, disrupted tourism, air freight problems), will constrain both exports and imports in the near term.”

And things are unlikely to change in the near future unless the world economic growth improves.

“With growth and sentiment in our major trading partners anything but encouraging, export volumes and receipts are set for a tough time in September and into the fourth quarter,” Mr McKay said.

“Recent moves in the currency market, which have seen the Australian dollar fall some seven per cent in trade weighted terms, will assist somewhat, but cannot be a full offset in the current environment.”

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