Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ terms of trade reaches new 40-year high in 4th quarter

NZ terms of trade reaches new 40-year high in 4th-qtr as import prices fall

March 3 (BusinessDesk) - New Zealand’s terms of trade rose to a 40-year high for the second straight quarter in the final three months of 2013 as import prices fell more than export prices. On a volume measure, dairy products led exports higher while imports were unchanged.

Terms of trade, which measures the quantity of imports the country can buy with a set amount of exports, gained 2.3 percent in the fourth quarter to the highest level since December 1973, according to Statistics New Zealand. It would need to climb another 3.5 percent to match the all-time high recorded in the June quarter of 1973.

The kiwi dollar recently traded at 83.73 US cents, up from 83.58 cents immediately before the figures were released at 10:45am. The gain in terms of trade exceeded the 2 percent forecast in a Reuters survey.

Export prices fell 0.5 percent, against expectations of a 1 percent gain, while import prices declined 2.8 percent versus a forecast 1 percent decline. That follows an 8.9 percent gain in export prices in the third quarter, led by a surge in milk powder and butter, and gains for forestry and meat.

Dairy export prices fell 1.1 percent in the fourth quarter, the only decline recorded in 2013, while forestry dropped 2.1 percent. Wool prices rose 8.7 percent and meat was up 0.2 percent.

Export volumes rose 9.7 percent, led by a 23 percent gain in dairy products, helping lift the actual value of dairy exports by 27 percent even as prices fell. Meat volumes climbed 5.5 percent, while petroleum products fell 24 percent and forestry volumes were down 0.5 percent. Import volume were unchanged as a 7.8 percent decline for capital goods was offset by a 75 percent jump in petrol and avgas volumes, a 2.1 percent gain for intermediate goods and consumption goods, and a 6.2 percent increase in cars.

The decline in import prices was led by a 3.8 percent drop in mechanical machinery, a 3.7 percent fall for chemicals and a 5.2 percent decline for electrical machinery, with some of the drop attributable to a strong New Zealand dollar, the government statistician said.

“The sky-high terms of trade will provide a key pillar of support to stronger growth in the New Zealand economy this year,” said Anne Boniface, senior economist at Westpac Banking Corp.

“While we don't think the terms of trade can continue to head north forever, we do suspect a good chunk of the recent strength in the terms of trade reflects structural changes in the drivers of New Zealand's key exports - in particular, increased demand for New Zealand's commodity exports from China and other emerging economies,” she said in a note.

The terms of trade for services such as tourism rose 1.5 percent, with a 0.2 percent gain in services export prices and a 1.3 percent decline for imports.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news