|Merchandise trade Balance - level||NZ$350M||NZ$123M||NZ$183M|
|Exports - M/M percent change||5.5%||-15.3%||-15.7%|
|Exports - Y/Y percent change||-4.7%||-5.5%||-6.2%|
|Imports - M/M percent change||1.5%||-2.9%||-6.9%|
|Imports - Y/Y percent change||-6.9%||2.6%||0.3%|
In May 2015, the goods trade surplus was NZ$350 million, slightly down from an average surplus over the previous five May months. For the year ended May 2015, the annual goods trade deficit was $2.6 billion.
May total goods exports declined 4.7 percent to NZ$4.4 billion in May 2015 compared with May 2014. Milk powder, butter and cheese exports led the decline were down 28 percent. However, despite dairy exports falling, they accounted for one-fifth of total goods exports in May. At its peak, dairy made up two-fifths of total goods exports. The decline in milk powder, butter and cheese exports was led by whole milk powder, down 37 percent, with quantities down 6.9 percent. Whole milk powder export values to China have been low this year compared with last year, but values to other countries have remained fairly stable.
Goods imports were down 6.9 percent. Intermediate goods fell NZ$259 million, led by crude oil and capital goods fell NZ$80 million. Consumption goods were up $4.8 million.
The international trade balance measures the difference between imports and exports of both tangible goods and services. Imports may act as a drag on domestic growth and they may also increase competitive pressures on domestic producers. Exports boost domestic production. Trade balance values are calculated by deducting imports (cif) from exports (fob).
Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect the value of the NZ dollar in the foreign exchange market. Imports indicate demand for foreign goods in New Zealand. Exports show the demand for NZ goods in countries overseas. The currency can be sensitive to changes in the trade deficit run by New Zealand since this trade imbalance creates greater demand for foreign currencies. The bond market is also sensitive to the risk of importing inflation.