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Merchandise Trade Balance - October 2001

Data Flash (New Zealand)
Merchandise Trade Balance - October 2001

A provisional merchandise trade deficit of $267m was recorded in October, compared with a deficit of $185m in October 2000. The average deficit for October over the past 10 years is $249m. The annual trade surplus was $796m, compared with a deficit of $2,901m a year earlier.

The result was much worse than the median market expectation of a zero balance. Export values were weaker than expectations while import values were stronger than expectations.

The value of exports for the three months to October was 5.9% higher than a year earlier. However, exports for the month of October were virtually unchanged from last year's level. A breakdown of the export data by type will be released on 12 December.

The estimated level of imports for the three months to October was 3% lower than a year earlier. While this is partly due to much lower prices for crude oil, the weak level of imports, despite ongoing economic growth over this period, continues the trend of declining import penetration in the face of a weak NZD. Excluding `lumpy' imports of capital transport and military equipment, `core' imports for the 3 months to October were 2.0% lower than a year earlier.

Imports for the month of October were higher than expected due largely to the import of an aircraft (valued between $50m and $100m) and very strong imports of motor vehicles (dealers are reported to be stocking up on cars prior to a scheduled tightening of import standards).

Imports were recorded as being exceptionally weak in September, partly due to the exchange rate convention used by Statistics NZ. Seasonally adjusted series calculated by Statistics NZ show that all key categories of imports rebounded in October, but remained below the levels typical of the past six months.

Commentary

Distortions to the timing of export and import flows as a result of the events of 11 September make it a little difficult at present to interpret trends from monthly data.

That said, the relatively weak outcome for exports is a little disconcerting. We will be interested to see the break down of the export figures on 12 December.

Excluding non-core factors, the weak imports result was in line with our expectations.

Our latest Economic Forecasts, containing an updated assessment of the New Zealand's economic outlook, will be released later today (embargoed to the media until 1am tomorrow morning).


Next Trade Release: October (Exports), 12 December

Darren Gibbs, Senior Economist, New Zealand

This, along with an extensive range of other publications, is available on our web site http://research.gm.db.com

Please do not respond to this mailbox. If you need to update your contact information or request new research, contact your Deutsche Bank Sales Contact.


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