Trade imbalance tops $4 billion in year
NEW Zealand’s annual trade deficit has topped $4 billion for the first time in nine years, a weakening in dairy export values unexpectedly widening the gap.
For the year to June, New Zealand’s annual imports increased by $6.02 billion to $59.55 billion, while exports rose by $5.65 billion to $55.52 billion — a deficit of $4.03 billion, according to Statistics New Zealand data.
For the month of June, the trade balance slipped into a $113 million deficit, weaker than market and Westpac expectations of a $200 million surplus and ASB’s expectations of a $100 million surplus.
ASB’s senior rural economist Nathan Penny said the trade balance was weaker than expected and the June deficit was the largest in a decade.
‘‘We expect the annual trade balance to narrow over the remainder of 2018, although higher oil prices will make the improvement gradual,’’ he said in a statement.
Mr Penny said lowerthanexpected export values accounted for about two thirds of the surprise decline in the June deficit, to $113 million.
‘‘In particular, dairy exports values were weaker than expected, with dairy export prices falling around 2%, whereas we had anticipated a small rise,’’ he said.
Westpac senior economist Michael Gordon said in seasonally adjusted terms, exports rose by 2.5% in June, which was a smaller gain than expected, although there no standout drivers behind the surprise.
‘‘Exports of primary products were generally flat or lower, offset by a pickup in exports of manufactured goods,’’ Mr Gordon said in a statement.
Seasonally adjusted imports were up 6.8% for the month, mostly due to fuel.
Oil imports dipped during the maintenance shutdown of the Marsden Point refinery in May, but the rebound in June was larger than expected.
Imports of plant and machin ery were now easing back after a strong runup in late 2017 and early 2018, Mr Gordon said.
SNZ’s acting international statistics manager Dave Adair said the last June year surplus was in 2014, driven by high dairy export values.’’
‘‘Exports dipped in 2015, leading to a deficit, which has widened since due to steadily rising imports,’’ BusinessDesk reported.
The latest rise in annual imports was led by $24 billion of intermediate goods, up $3 billion from the year earlier, the Mr Adair said.
Petroleum and products, excluding petrol, led the intermediate goods rise, up by $850 million. This was followed by parts of transport equipment, up $416 million, and parts of plant and machinery, up $413 million.
The gain in annual exports was mostly due to an increase in dairy products, the country’s largest export commodity group, which rose by $1.65 billion to $14.16 billion, BusinessDesk said.
That was followed by a $1.01 billion gain in the value of meat and edible offal exports to $7.05 billion, and a $740 million increase in the value of forestry product exports to $4.96 billion. — Additional reporting BusinessDesk