Trade deficit widens as capital goods imports rise

Media release

7 December 2012

Australia recorded a seasonally-adjusted trade deficit of $2.1 billion in October, as a small month-on-month rise in exports was offset by a bigger rise in imports.

The Australian Bureau of Statistics said today exports rose 0.4 per cent to $24.4 billion on the September figure, while imports were up 3 per cent at $26.5 billion.

The deficit, up 47 per cent on the September balance, was in line with expectations.

Of total imports, there was a nearly 13 per cent increase in capitals goods, to just under $6 billion. Much of this was related to investment in the mining and energy sector.

Trade Minister Craig Emerson said this increase reflected continued confidence in the Australian economy and in global demand for resources.

The national accounts this week confirmed that new business investment is now at 50-year highs.

"Capital goods are deployed to expand productive capacity and improve efficiency," Dr Emerson said.

"These latest figures confirm that mining and energy investment remain strong and is yet to hit its peak."

Despite continued weakness around the world, Dr Emerson noted healthy increases in goods exports to Asian trading partners such as China, India, Indonesia, Korea and Singapore.

The value of goods exports to China rose nearly 20 per cent in the month, to $6.3 billion. Exports to Indonesia were ahead more than 21 per cent at $482 million, while shipments to India grew more than 27 per cent to $1.3 billion.

In contrast, goods exports to Europe fell 9 per cent.

"Australia's engagement with Asia has helped us enjoy 21 years of recession-free growth," he said.

"Integrating Australia's economy more completely with the regional economy in this, the Asian Century, will help assure continued prosperity."

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