The latest trade figures, out this morning, point to a continued slow and patchy export-led recovery.
Exports were up by $394 million in July, or 12%, on the same month last year, and recorded the highest ever export values for July, at $3.6 billion, driven primarily by a rise in milk powder butter and cheese, up $179 million. (The highly seasonal nature of New Zealand’s export trade means Statistics New Zealand makes comparisons with the same period last year rather than month-on-month).
That shows a continued strong trend in growth and export levels are now close to their peak in late 2008, said Statistics New Zealand.
By country, Australia recorded the largest increase, up $96 million or 13%, with crude oil exports accounting for more than half of this. Second largest was exports to China, which rose $90 million (30%), mostly milk powder, butter and cheese.
Exports to South Korea were also up, $52 million (58%), over a range of commodities.
The one surprise is that Italy was fourth, up $49 million, mostly because of export of pleasure boats.
Over on the import side of the ledger there is still an increase although it is flattening out. The trend is 15% higher than it was this time last year but “this is still 15% lower than its peak in September 2008,” Statistics New Zealand said.
What growth there has been has been mostly intermediate goods – dominated by chemicals and fertilisers as well as fuel and lubricants, up 253 million (16%). That rise returns imports of such goods to pre-recession levels.
In perhaps a pointer to a pre-GST stock-up in the hope of a buying surge before the sales tax goes up in October, there was a rise in the import of consumption goods, up $42 million (4.7%), mostly consumer durables.
Imports of capital goods as a category fell – which normally at this point in the economic cycle would be a major warning sign, as even the prospects of an economic recovery usually mean a pickup in capital investment by firms. However, these results are skewed because one of the country’s airlines bought an aircraft in the previous period.
If that aircraft is taken out, overall capital goods imports increased $71 million in value in July, with the crucial plant and machinery category rising $48 million.
Rob Hosking
Mon, 30 Aug 2010