NZ posts its first monthly trade surplus in 21 months

By NZPA

Thursday 27th April 2006

New Zealand posted a surprise trade surplus in March, breaking a streak of 21 months of deficits, Statistics New Zealand said today.

Instead of the $267 million deficit economists had predicted, there was a surplus of $59m. The New Zealand dollar fell 4.4% during March but economists believe it is too soon for the fall to significantly affect trade.

March is traditionally a strong month for exports although in 2005 there was a $190m deficit.

The annual deficit still ballooned to $7.072 billion - a record for a March year. However, it was slightly less than last month's record of $7.321 billion. In the March 2005 year, the deficit was $4.36 billion.

This month's surplus was equivalent to 1.9% of exports whereas the average March month surplus over the last decade has been 3.5% of exports.

Exports during the month were 13.8% higher than in March 2005 with dairy exports the main contributor.

Imports were up 4.6% on a year ago, mainly due to the higher cost of oil and petrol products. However, there was a falloff in car imports, particularly cars exceeding 3000cc, SNZ said.

On a seasonally adjusted basis, exports increased 2.6% in the March quarter following a 4.6% increase in the December quarter. The main contributors were milk powder, butter, and cheese; aluminium products; mechanical machinery and equipment; and wool.

Dairy products were up 3.7% on top of a 10% increase in the December quarter.

Aluminium was up 12.4% on top of the 9.4% increase in the December quarter. Although aluminium volumes fell 2.2%, possibly reflecting the shutdown of some pots at the Tiwai Point aluminium smelter in Bluff due to high power prices, values increased 23% to a five-year high.

Meat and edible offal exports were down 14.9% on the December quarter and meat exports were their lowest in five years.

Seasonally adjusted imports rose 4% on the December quarter with crude oil imports up 27% ($171m).

Capital goods imports fell with transport equipment (that includes cars) down 18%. Car imports fell 11%. However, the biggest contributor to the transport sector's fall was aircraft. Machinery and plant increased 5%.

Of New Zealand's top five trading partners, only exports to Australia increased during the March year. Exports to the United States, Britain and Japan all fell by 5% or more.

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