Falling commodity prices and growing demand for imports saw Australia’s trade surplus narrow in October.

The trade surplus narrowed to $1.595 billion in October compared to $2.249 billion for the previous month, figures released by the Australian Bureau of Statistics on Monday showed.

The October figure was below economists’ predictions of a $2 billion surplus.

Nomura chief economist Stephen Roberts said the weaker than expected result reflected a drop in commodity prices.

“When you look at rates compared to volumes, especially for iron ore, the volumes were actually up during the month but the value was down quite a bit. And this is a very large export item.

“We still have a good trade surplus, but it’s clearly a bit volatile because the prices of commodities have moved around.”

Growing demand for imports, especially in capital goods, also impacted on the surplus.

The ABS figures showed imports rose 2 per cent in October while export growth was flat.

Most economists expect Australia to continue posting solid trade surpluses in the coming months although they may continue to narrow.

“The trade data continues to confirm that Australia is paying its way in the world,” CommSec economist Savanth Sebastian said.

“The dollars keep flowing in, ensuring that Australia has notched up its 18th trade surplus in 19 months, totalling over $34 billion.”

Mr Sebastian said that a slowdown in China was affecting the domestic economy, with coal and iron ore exports both down.

However, he said the Chinese economy was unlikely to collapse and Australia could expect its run of trade surpluses to continue.

“Chinese authorities have plenty of scope to stimulate their economy, especially given that inflation is in check,” he said.

“As such, the latest slowdown in China may moderate the size of the trade surpluses rather than see them disappear altogether.”