Australia’s trade surplus narrowed sharply in May, slumping to its lowest level in five years, as weak global demand dragged on exports and imports rebounded strongly from the previous month’s decline.
According to data released by the Australian Bureau of Statistics (ABS) on Thursday, the seasonally adjusted goods trade surplus fell by A$2.62 billion to $2.24 billion in May.
This marked a significant decline from April’s revised $4.86 billion surplus and came in well below market expectations of $5 billion.
The reading was the weakest trade surplus recorded since August 2020.
The drop was largely driven by a steep decline in exports, which fell by $1.17 billion or 2.7%, primarily due to a drop in non-rural goods.
This weakness has been linked to ongoing disruptions in trade with China, Australia’s largest trading partner, which has seen demand soften amid its own economic slowdown and the impact of steep U.S. trade tariffs.
Imports, meanwhile, surged in May, rising by $1.45 billion or 3.8%, led by a sharp rise in capital goods imports.
Capital goods jumped $806 million or 8.6% on the month, driven by a 19.6% increase in ‘miscellaneous capital goods not elsewhere specified’.
Consumption goods also rose by 3.0%, with a notable rise in non-industrial transport equipment, which climbed by 7.9%.
Imports of intermediate and other merchandise goods increased 1.8%, largely driven by fuels and lubricants, which lifted 3.2%.
