Exports slump due to coronavirus

New Zealand’s exports to China were $142 million less in February than in the same period of 2019, new Stats NZ data shows.

It has released provisional data on exports and imports for the four weeks and one day to February 29.

It shows New Zealand exports were worth $1.1 billion in that period, down by $142m. Total New Zealand exports were $4.9b, a similar level to 2019.

For the four weeks to February 23, meat exports were $170m, down from $280m in 2019. Forestry’s exports were worth $180m, down from $250m 12 months earlier. Seafood dropped from $70m to $30m. Dairy exports were of similar value to 2019 because higher prices made up for lower quantities.

New Zealand imported about $540m less in February this year than in February 2019.

BNZ head of research Stephen Toplis said exports held up as well as could be expected. The declines were in areas where it was apparent there was pressure.

Infometrics chief forecaster Gareth Kiernan agreed the data was not surprising. He said the bigger question related to when the situation would return to ‘‘something like normal’’.

Factories in China were picking up again, he said, with capacity back to about 40 per cent. International effects of coronavirus were increasing, so there was the potential for the virus to affect New Zealand’s trade with other parts of the world, too, he said.

‘‘Even if China picks up we’re probably not through the worst of it yet.’’

He said the way China had ‘‘clamped down’’ to manage the spread of the virus had been draconian but seemed successful. Had it not spread to other countries, it could have had a ‘‘short, sharp’’ impact, he said.

But as it was, he said the virus seemed to be the once-in-10-years or once-in-20-years event that derailed New Zealand’s economic growth.

China’s economy had already been weakening before the virus hit, he said.

A briefing paper prepared for Cabinet by the Ministry of Business Innovation and Employment on the economic impact of the coronavirus outbreak highlights New Zealand’s huge exposure to China. It pointed out that China increased its dominance as New Zealand’s leading export destination last year, accounting for 28 per cent of goods export values, up from 24 per cent in 2018.

The rock lobster industry was the most acutely affected with 99 per cent of live lobster exports going to China, followed by logs at nearly 60 per cent.

More than a third of dairy, meat, infant formula, seafood, pulp and paper and wool exports were also sent to China.