Thursday, 29 May 2003 - MVT37/2003

Strong domestic demand, SARS and the drought reflected in April trade figures

Severe Acute Respiratory Syndrome(SARS), the drought, sluggish world growth and strong domestic demand were reflected in the April 2003 International Trade in Goods and Services Data released by the ABS today, Trade Minister Mark Vaile said. 

The impact of SARS contributed to a fall in services exports, in seasonally adjusted terms, of $169 million, while the continuing effects of the drought saw exports of rural goods fall by $175 million.  Sluggish world growth saw non rural and other goods fall by $695 million.

Concern about SARS and the global international security environment led to a significant fall in international travel which affected our tourism exports.  The seasonally adjusted preliminary estimate of short-term visitor arrivals for April 2003 is the lowest in over five years.  SARS also impacted on our wool exports to China and led to a fall in business travel which has a broader impact on our exports as a whole, Mr Vaile said.

“While rain has been welcome in parts of Australia the drought continues to hit rural communities.  In original terms, wheat exports fell by $44 million in April while exports of greasy wool fell by $95 million,” Mr Vaile said.  

“Reflecting the strength of the Australian economy, April imports of goods and services rose $614 million in seasonally adjusted terms, with imports of consumption goods increasing $474 million and capital goods rising $184 million.”

These factors combined to deliver a record deficit on the balance of goods and services of $3.1 billion in April 2003 in seasonally adjusted terms. 

“It is worth remembering that the OECD's recent review of Australia notes that the size of our trade and current account deficits are not a cause for concern as they have been in the past, as structural reforms to the economy have ensured '...private sector saving and investment decisions are likely to be efficient',” Mr Vaile said.

“Australia is also not alone in facing a difficult export environment.  Exports from other regional economies have also been negatively affected by global economic developments, including New Zealand, Japan, Singapore and Thailand.”

Despite the tough times facing us, Australia’s robust economic fundamentals mean we are well placed to meet these challenges.

Contact:  Matthew Doman 02 6277 7420