NZ: Merchandise trade

Wed May 23 17:45:00 CDT 2018

Actual Previous Revised
Merchandise trade Balance - level NZ$263M NZ$-86M NZ$-156M
Exports - M/M percent change 7.2% -2.6% -3.2%
Exports - Y/Y percent change 7.3% 5.8% 4.5%
Imports - M/M percent change 0.8% 5.3% 7.3%
Imports - Y/Y percent change 15.1% 14.1% 14.4%

New Zealand's merchandise trade balance swung from a revised deficit of NZ$156 million in March to a surplus of NZ$263 million in April. This is lower than the average April surplus of NZ$344 million over the last five years.

Exports grew 7.3 percent on the year in April, picking up from revised growth of 4.5 percent in March. Agricultural products were the main factor pushing up headline exports, with dairy, meat and fruit exports all recording solid growth. Exports to China rose 21.0 percent on the year in April, with exports to Japan and the European Union also higher on the year, offset by year-on-year declines in exports to Australia and the United States. Using seasonally adjusted data, New Zealand's exports rose 7.2 percent on the month in April, rebounding from 3.2 percent decline in March.

Imports of goods rose by 15.1 percent in April, up slightly from revised growth of 14.4 percent in March. Headline growth was largely driven by stronger fuel imports, up 56.0 percent on the year, with imports of vehicles and electrical machinery and equipment also making significant contributions. Using seasonally adjusted data, New Zealand's goods imports rose 0.8 percent on the month in April after increasing 7.3 percent in March.

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.