Booming car imports put the brakes on trade surplus
A jump in new car imports as supply chains are restored from their pandemic doldrums has led to a narrowing in Australia's trade surplus.
Data released by the Australian Bureau of Statistics on Tuesday showed the trade surplus fell to a small-than-expected $11.6 billion in January from an upwardly revised $13 billion in December.
Exports grew 1.4 per cent, while imports swelled by 4.6 per cent.
Commonwealth Bank economist Belinda Allen said passenger vehicles drove the five per cent uptick in goods imports as incoming car shipments lifted 30.9 per cent.
"Over the past year, car imports have risen by around 75 per cent as supply chains have been unblocked, shipping costs have lowered and following strong orders over the pandemic period," she said.
Ms Allen also said strong demand for electric cars was potentially playing a role.
Goods exports lifted 1.1 per cent over the month, while a decline in cereal grains contributed to a 2.9 per cent fall in rural goods.
A strong lift in iron ore exports contributed to a 1.5 per cent lift in non-rural exports that was partially offset by falls in coal and gas exports.
Services exports lifted 3.1 per cent, with reopened borders continuing to feed into robust tourism and education exports.
"The reopening of China's economy in December has added a further dimension to the lift in foreign students and tourism," Ms Allen said.
Services imports - which includes Australians travelling overseas - fell 3.3 per cent.
The Reserve Bank board also made its March cash rate decision on Tuesday, opting to hike rates by another 25 basis points to counter elevated inflation.
The latest increase brought the cash rate to 3.6 per cent, the highest level in more than a decade.
The 0.25 percentage point lift was widely expected and likely weighed on ANZ and Roy Morgan's consumer confidence index.
The indicator has been tracking well below monthly averages and returned another depressed result, falling 0.1 points to 79.9.
But the index did show a 2.9-point recovery in confidence for those paying off a mortgage despite the impending interest rate decision.
ANZ senior economist Adelaide Timbrell said the improved sentiment among mortgage holders followed a sharp fall.
Confidence among renters and outright home owners slid last week, but Ms Timbrell said both groups were still tracking above those paying off a home loan.