| Actual | Previous | Revised | |
|---|---|---|---|
| Balance | NZ$-1,709M | NZ$-2,329M | NZ$-2,425M |
| Imports - M/M | -4.9% | 1.5% | 1.4% |
| Imports - Y/Y | -14.0% | -14.6% | -14.7% |
| Exports - M/M | -1.6% | -1.7% | -3.2% |
| Exports - Y/Y | -9.3% | -17.6% | -19.4% |
Highlights
New Zealand's merchandise trade balance narrowed from a revised deficit of NZ$2,425 million in September to NZ$1,709 million in October. Exports fell on the for the second consecutive month while imports fell after a previous increase. Today's data show ongoing weakness in Chinese demand for New Zealand exports.
Exports fell 1.6 percent on the month in October after a decline of 3.2 percent in September and dropped 9.3 percent on the year after a previous decline of 19.4 percent. Weakness in year-over-year growth was broad-based, with exports of meat, dairy products, fruit, forestry products and many manufactured products all recording large year-over-year declines. Exports to Australia, China and the European Union fell sharply on the year, partly offset by increase in exports to the United States and Japan.
Imports fell 4.9 percent on the month in October after increasing 1.4 percent in September and fell 14.0 percent on the year after a previous decline of 14.7 percent. All major categories of imports recorded year-over-year declines. Imports fell on the year from China, Australia, and the United States, partly offset by an increase in imports from Japan.
Exports fell 1.6 percent on the month in October after a decline of 3.2 percent in September and dropped 9.3 percent on the year after a previous decline of 19.4 percent. Weakness in year-over-year growth was broad-based, with exports of meat, dairy products, fruit, forestry products and many manufactured products all recording large year-over-year declines. Exports to Australia, China and the European Union fell sharply on the year, partly offset by increase in exports to the United States and Japan.
Imports fell 4.9 percent on the month in October after increasing 1.4 percent in September and fell 14.0 percent on the year after a previous decline of 14.7 percent. All major categories of imports recorded year-over-year declines. Imports fell on the year from China, Australia, and the United States, partly offset by an increase in imports from Japan.
Definition
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).
Description
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.
