ANALYSIS AND COMMENTS


BALANCE ON GOODS AND SERVICES

The trend estimate of the balance on goods and services was a surplus of $2,042m in December 2010, a decrease of $160m on the surplus in November 2010.

In seasonally adjusted terms, the balance on goods and services was a surplus of $1,981m in December 2010, a decrease of $97m on the surplus in November 2010.

The sum of seasonally adjusted balances for the three months to December 2010 was a surplus of $6,648m, an increase of $648m on the surplus of $6,000m for the three months to September 2010. However, if seasonal factors used in compiling the quarterly balance of payments are applied, the December quarter 2010 surplus was $6,756m, an increase of $726m on the revised September quarter surplus of $6,030m.


EXPORTS OF GOODS AND SERVICES

Between November 2010 and December 2010 the trend estimate of goods and services credits fell $160m (1%) to $24,268m.

In seasonally adjusted terms, goods and services credits rose $85m to $24,579m. Non-rural goods rose $227m (1%), rural goods rose $21m (1%) and net exports of goods under merchanting rose $1m (25%). Non-monetary gold fell $118m (10%). Services credits fell $46m (1%).


Exports of goods

RURAL GOODS

In trend terms, exports of rural goods fell $7m to $2,338m.

In seasonally adjusted terms, exports of rural goods rose $21m (1%) to $2,386m.

The main components contributing to the rise in the seasonally adjusted estimates were:

• wool and sheepskins, up $47m (20%)
• meat and meat preparations, up $34m (6%).

Partly offsetting these increases was the cereal grains and cereal preparations component, down $37m (6%).

NON-RURAL GOODS

In trend terms, exports of non-rural goods fell $137m (1%) to $16,280m.

In seasonally adjusted terms, exports of non-rural goods rose $227m (1%) to $16,695m.

The main components contributing to the rise in the seasonally adjusted estimates were:

• other manufactures, up $149m (11%)
• metals (excl. non-monetary gold), up $108m (11%)
• machinery, up $99m (15%).

Partly offsetting these increases was the metal ores and minerals component, down $164m (3%).

For price and volume details, see the section Selected commodities table at the end of this section.

NET EXPORTS OF GOODS UNDER MERCHANTING

In trend terms, net exports of goods under merchanting fell $6m to -$4m.

In seasonally adjusted terms, net exports of goods under merchanting rose $1m (25%) to -$3m.

NON-MONETARY GOLD

In trend terms, exports of non-monetary gold fell $4m to $1,222m.

In seasonally adjusted terms, exports of non-monetary gold fell $118m (10%) to $1,111m.


Exports of services


In trend terms, services credits fell $5m to $4,433m.

In seasonally adjusted terms, services credits fell $46m (1%) to $4,390m.

The main component contributing to the decrease in the seasonally adjusted estimates was travel, down $45m (2%).

In seasonally adjusted terms, tourism related services credits fell $40m (1%) to $2,911m.


IMPORTS OF GOODS AND SERVICES

Between November 2010 and December 2010 the trend estimate of goods and services debits remained steady at $22,226m.

In seasonally adjusted terms, goods and services debits rose $182m (1%) to $22,598m. Intermediate and other merchandise goods rose $643m (8%). Non-monetary gold fell $201m (34%), capital goods fell $155m (4%) and consumption goods fell $49m (1%). Services debits fell $57m (1%).

Preliminary analysis shows that, in seasonally adjusted terms, goods imports volumes increased 2.9% during the December quarter 2010 and the implicit price deflator fell 4.2%. In original terms, the Chain Laspeyres price index fell 3.8% while the implicit price deflator fell 4.3%. The final volume and price outcomes will be published in the December quarter 2010 issue of Balance of Payments and International Investment Position, Australia (cat. no. 5302.0).


Imports of goods


CONSUMPTION GOODS

In trend terms, imports of consumption goods fell $23m to $5,352m.

In seasonally adjusted terms, imports of consumption goods fell $49m (1%) to $5,348m.

The main component contributing to the fall in the seasonally adjusted estimates was household electrical items, down $56m (13%).

CAPITAL GOODS

In trend terms, imports of capital goods rose $11m to $3,920m.

In seasonally adjusted terms, imports of capital goods fell $155m (4%) to $3,946m.

The main components contributing to the fall in the seasonally adjusted estimates were:

• civil aircraft and confidentialised items, down $73m (12%)
• machinery and industrial equipment, down $37m (3%)
• telecommunications equipment, down $28m (5%).

INTERMEDIATE AND OTHER MERCHANDISE GOODS

In trend terms, imports of intermediate and other merchandise goods rose $23m to $7,732m.

In seasonally adjusted terms, imports of intermediate and other merchandise goods rose $643m (8%) to $8,233m.

The main components contributing to the rise in the seasonally adjusted estimates were:

• fuels and lubricants, up $426m (17%)
• other merchandise goods, up $170m
• processed industrial supplies n.e.s., up $48m (3%).

NON-MONETARY GOLD

In trend terms, imports of non-monetary gold rose $16m (3%) to $498m.

In seasonally adjusted terms, non-monetary gold debits fell $201m (34%) to $387m.


Imports of services


In trend terms, services debits fell $27m (1%) to $4,724m.

In seasonally adjusted terms, services debits fell $57m (1%) to $4,684m.

The main components contributing to the fall in the seasonally adjusted estimates were:

• transport, down $22m (2%)
• travel, down $18m (1%)
• other services, down $15m (1%).

In seasonally adjusted terms, tourism related services debits fell $16m (1%) to $2,572m.


Selected Commodities

Selected commodities, Price and volume analysis: Recorded Trade Basis
		Jul 2010	Aug 2010	Sep 2010	Oct 2010	Nov 2010	Dec 2010
		%	%	%	%	%	%
Iron ore
Lump
	Volumes	2	-5	8	10	-11	13
	Price	9	-2	-2	-12	-	1
Fines
	Volumes	-9	2	4	7	-6	13
	Price	5	-3	-2	-11	1	1
Coal
Hard coking
	Volumes	-27	36	-11	-4	10	-4
	Price	2	3	-4	-6	-7	-1
Semi-soft
	Volumes	-3	-10	-8	8	-5	7
	Price	1	2	-10	-	-6	-1
Bituminous (Thermal)
	Volumes	4	4	7	-1	-19	15
	Price	-2	-2	-1	-6	-	2
- nil or rounded to zero (including null cells)

On a recorded trade basis, between November and December 2010, large value increases were recorded for the following selected commodities:

• iron ore (lump) rose $172m (14%) with exports to Japan up $116m (50%) and China up $58m (8%), driven by increases in volumes of 52% and 5% respectively
• iron ore (fines) rose $439m (14%) with exports to China up $276m (11%) and Japan up $105m (27%), driven by increases in volumes of 10% and 23% respectively
• hard coking coal fell $99m (5%) with exports to Japan down $70m (14%) driven by a decrease in volume (12%)
• semi-soft coal rose $39m (6%) with exports to China up $62m, driven by an increase in volume (83%). This was partly offset by a fall in exports to Japan down $43m (15%)
• bituminous (thermal) coal rose $170m (17%) with exports to Japan up $74m (14%) and China up $65m (52%), driven by increases in volumes of 11% and 48% respectively.