Australian trade surplus slowed during November, economist reports

AUSTRALIA’S Trade surplus narrowed in November, as major commodity exports fell, and capital goods imports indicated a possibility of softer business investment ahead, a senior economist reports.

Westpac senior economist Mantas Vanagas noted a goods trade balance of $2.9bn, with export values down 2.9% and import values up 0.2%.

“The volatile nature of the monthly goods trade data usually shows mixed patterns across different trade categories,” Mr Vanagas said.

“While the latest release for November was no exception, most of the major themes we highlighted in recent months, such as high volatility in gold trade flows, strength in rural goods exports, and weakness in capital goods imports, remained broadly intact.”

After a September quarter described as “disappointing”, when net trade was reported to have negatively impacted GDP, and stronger October figures which showed an increase in the nominal trade balance, the latest November data brought a $1.4bn fall in the headline surplus to $2.9bn.

This was described as “one of the lowest levels in recent years”, around $1bn below the average of 2025.

During September and October, exports gained more than 11%, so the retreat from those elevated levels, the highest in two years, was described as “not particularly surprising”.

“Major commodity exports were a notable drag, falling by 5.7%month, the steepest decline since the start of 2025,” Mr Vanagas said.

“The 9.1%mth drop in iron ore exports was disappointing, but it is worth noting that this followed two strong increases in September and October.”

He said the underlying trend in nominal iron ore outflows remained “broadly flat”, when steel production in China continued to decline.

“Meanwhile, coal exports also contracted by 2.2%mth, marking an eighth negative reading in the eleven months of 2025,” Mr Vanagas said.

Exports of liquefied natural gas were described as little changed, after falling sharply in August and September, and recovering slightly in October.

Among other major exports, rural goods once again “surprised to the upside”, rising almost to 10%mth to reach a new high.

“The strength was broad-based, but the main driver was meat exports, which rose at a double-digit monthly pace after more mixed results recently,” Mr Vanagas said.

Looking at major export destinations, exports to China were little changed, despite the weakness in iron ore exports, which represent around 60% of the goods flow to the world’s second largest economy.

Exports to the US were only slightly lower in the month, as reduced gold exports were offset by higher beef exports, which in mid-November were exempted from the US import tariffs.

Among other major export partners, exports to the UK and Hong Kong rose significantly during the month, while flows to India declined.

Mr Vanagas anticipated the recent trends in Australian goods trade flows would persist in the near term, with strong rural goods exports.

“Further out, rural goods exports may begin to ease due to tightening supply,” he said.

“Iron ore exports will warrant close attention, especially given tensions between Australian exporters and Chinese authorities, who are seeking to leverage their power to obtain better prices.

Firm growth in domestic demand was predicted to support imports growth.