Trade deficit narrows as imports fall

A fall in imports has more than offset a further decline in exports to narrow Australia's trade deficit to just under $1.5 billion.

Bureau of Statistics figures for September show imports fell 2 per cent to $25.6 billion, while exports eased 1 per cent to $24.2 billion, leaving Australia's trade deficit at $1.46 billion, down from $1.88 billion in August.

The Bureau also released its September quarter figures, which show Australia's trade deficit doubled in the three months to September compared with the three months to June.

Most significant in the quarterly data was a 15 per cent ($3.2 billion) fall in the value of metal ore and mineral exports.

Iron ore exports were down 16 per cent due to a 17 per cent fall in prices, which easily offset a 2 per cent rise in the quantity of ore exported.

Coal exports were down 7 per cent, again with the quantity rising, but the price sliding.

The Commonwealth Bank's chief economist Michael Blythe says the result was quite close to expectations.

"With trade numbers we're seeing the inevitable outcome of when the terms of trade move against you, then big deficits rather than big surpluses become the norm," he told Reuters.

Perhaps more worrying still was a 16 per cent ($767 million) slide in capital good imports, which is another sign that the investment boom in mainly resources sectors of the economy is slowing down.

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