A sharp fall in imports of goods such as industrial equipment and high-tech machinery could signal that businesses are finally scaling back investment in response to high interest rates.
Capital goods are things such as machinery, vehicles and construction equipment that are used to produce items and services purchased by consumers. They are a leading indicator of business investment. “The latter reinforces our view that business investment is likely to falter, following a strong showing in the first half of the year,” he said.Industrial transport equipment imports fell 29 per cent to $1.4 billion in August, while IT equipment imports fell 2.3 per cent to $1 billion and telco imports dropped 2.2 per cent to $1.3 billion.The trade surplus widened to $9.6 billion in August from a downwardly revised $7.
JP Morgan economist Jack Stinson said the headwind from lower commodity prices might fade, in part due to high oil prices leading to a potential lift in energy export values.after a months-long effort by major producers Saudi Arabia and Russia to take supply out of the market offset concerns about a slowdown in demand from China and Europe.