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

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news