NZ: Merchandise trade

Wed Mar 23 16:45:00 CDT 2016

Actual Previous Revised
Merchandise trade Balance - level NZ$339M NZ$8.1M NZ$13M
Exports - M/M percent change 9.2% -11.9% -12.0%
Exports - Y/Y percent change 9.3% 5.9% 5.8%
Imports - M/M percent change 0.8% -12.9% -13.1%
Imports - Y/Y percent change 2.8% 7.2% 6.9%

The merchandise trade surplus in February was NZ339 million including drilling platforms. Excluding drilling platforms, the surplus was NZ$72 million. Imports rose NZ$108 million (2.8 percent) to NZ$3.9 billion in February 2016, compared with February 2015. Consumption goods led the rise, up NZ$121 million (12 percent), with the largest increases being pharmaceuticals, toys, and sporting equipment. Since September 2014, monthly values of consumption goods have been rising when compared with the same month of the previous year. Intermediate goods imports showed little change in February 2016, however excluding a fall in crude oil (down NZ$11 million), intermediate goods rose NZ$20 million (1.4 percent). Capital goods fell in value, down NZ$29 million (3.9 percent) due to transport equipment. The fall was partly offset by a rise in cellphone imports, up NZ$18 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.