NZ: Merchandise trade

Wed Sep 23 17:45:00 CDT 2015

Consensus Actual Previous Revised
Merchandise trade Balance - level NZ$-875M NZ$-1035M NZ$-649M NZ$-726M
Exports - M/M percent change -10.6% 1.5% 0.7%
Exports - Y/Y percent change 5.6% 14.0% 13.3%
Imports - M/M percent change -2.8% 11.9% 13.2%
Imports - Y/Y percent change 19.2% 4.8% 5.9%

The August merchandise deficit ballooned to NZ$1,038 billion from NZ$728 million in July. Exports were up 5.6 percent from a year ago while imports jumped 19.2 percent. Goods imports were led by capital goods.

Meat and fruit led the increase in exports. Beef exports continued to rise, up 46 percent on the year. The beef export season runs from 1 October to 30 September. The U.S. remained the top beef export destination, for both value and quantity. Beef export values to the U.S. hit a record high of NZ$1.6 billion (up 64 percent) for the season to date, with quantities up 21 percent compared with this time last year.

Beef export values to China continued to increase, up 88 percent for the season to date, to NZ$394 million, with quantities up 52 percent compared with this time last year.

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.