Trade surplus drops but still positive

By Phil Boeyen, ShareChat Business News Editor

Thursday 26th July 2001

New Zealand's trade surplus fell back considerably in June from the previous month and was well below expectations, although overall the June year balance is much improved.

Figures show the country recorded a preliminary merchandise trade surplus of $110 million for June compared with $669 million in May. Economists had been predicting a surplus of around $200 million.

The value of imports rose to $2.67 billion - the fourth month a row that imports have increased, following three prior months of little change.

Statistics New Zealand says the value of seasonally adjusted imports rose 3.3% in the June quarter following a 5.7% fall in the March 2001 quarter.

"All major broad economic categories showed increases in value for the June 2001 quarter with the exception of crude oil, which showed a decrease in value due to lower volumes."

For the year ended June 2001 the merchandise imports value is $31,938 million, an increase of 9.4% from the previous June year.

The early estimate for merchandise exports in June is $2.78 billion, giving a trade surplus of $110 million for the month compared with a deficit of $17 million for June 2000.

HSBC economist Grant Fitzner says the June trade result is disappointing, but not disastrous.

"After May's record trade surplus odds favoured a substantial pullback in June.

"Although merchandise imports rose 4% in June, the main reason for the pullback was a 14% fall in exports - largely unwinding May's surprise 16% surge. It may simply be that June has seen a return to normality after May's record export numbers.

Mr Fitzner says the June surplus compares quite favourably with last June's deficit of $17 million, and the June year's deficit of $52 million is an improvement on the previous year's $179 million deficit.

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