Trade balance stays barely in surplus

New Zealand's high dollar is hitting exports, with lower returns for dairy products following an earlier drop in returns for other exports.

The latest overseas trade balance figures show an 8.7% dip in exports for March, with the total value of exports falling to $4.2 billion for the month.

Although much of the coverage of today's trade data will focus on the more downbeat quarterly figure for the three months to March 31 -- this showed a trade deficit of $787 million - the bulk of the data is already known.

That said, the March figure, which is the sole piece of new information in today's release, is not exactly positive reading.

Dairy product export returns fell $179m to $1.1 billion.

The trend for dairy exports seems to be starting a decline, Statistics New Zealand said in their release, "but more observations are required to confirm this".

Although the value of the exports is down, by volume the trend for dairy exports is up.

The trend in exports of meat and edible offal products has already been declining since July last year, but for logs and wood products it has been in decline since March.

Imports rose to $4.1 billion, up 1.2%, mostly because of a 55% surge in petroleum imports.

Crude oil imports rose $292m -- the largest monthly rise recorded.

Imports of consumption goods remains flat with a 0.2% rise, something which will give heart to policymakers trying to rebalance the economy away from consumption spending.

Of more concern, though, is the drop in capital goods, down 10%.

Some of this was caused by a couple of large transport items being imported in recent months -- the navy imported new ships and Air New Zealand also brought in aircraft.

However, plant and machinery imports are also down, by 1.2%.

Rob Hosking
Mon, 30 Apr 2012

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Trade balance stays barely in surplus