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

 

Lumpy imports drive bigger July trade deficit than expected

Lumpy imports drive bigger July trade deficit than expected

By Rebecca Howard

Aug. 26 (BusinessDesk) - New Zealand posted a much wider trade deficit than expected of $685 million in July but economists aren't fazed, saying it was skewed by lumpy imports.

Economists polled by Bloomberg had expected a monthly deficit of $254 million and an annual deficit of $5 billion. The annual deficit came in at $5.5 billion.

"Don’t fret about the much bigger than anticipated merchandise trade deficit reported for July. It was enlarged principally by greater than expected imports, in turn, partly because of aircraft imports. Merchandise exports were broadly in line with market expectations," said Bank of New Zealand economist Craig Ebert.

ANZ agri economist Susan Kilsby agreed the difference was largely on the import side and said the export data was in fact stronger than she expected.

Milk powder, butter and cheese exports fell 16 percent, or $243 million, in July. Butter exports alone fell 51 percent, or $139 million.

Exports of logs, wood and wood articles fell 19 percent, or $85 million. Logs alone fell $67 million, or 19 percent, but the quantity exported was little changed, Stats NZ said.

Kilsby said the impact on forestry was mainly in price, not volume. "We know that tree felling is slowing and in-market prices have already responded positively and exporters are relatively confident that prices will continue to firm as supply slows," she said.

Meat and edible offal exports fell 6.6 percent, or $42 million.

Exports to China, however, lifted 2.4 percent on the month to $1.37 billion and were up 20.4 percent on the year. Exports to Australia, however, were only up 0.8 percent at $701 million and were down 1.8 percent on the year.

Imports, meanwhile, rose $173 million, or 3.1 percent, to $5.7 billion, the largest import value since November 2018.

Transport equipment rose $96 million, or 37 percent, led by aircraft, up $124 million. Stats NZ noted transport equipment can fluctuate depending on the arrival of high-value items.

Imports from China dipped 1.8 percent on the month to $1.07 billion and were up 11.5 percent on the year at $12.9 billion.

ASB rural economist Nathan Penny said widening of the deficit will likely be temporary.

"New Zealand’s key food export values remain firm, while domestic demand is soft. We expect this combination to lead to a narrower annual trade balance over 2019 and 2020, although we are wary of global growth risks," said Penny.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Up 0.5% In June Quarter: Services Lead GDP Growth

“Service industries, which represent about two-thirds of the economy, were the main contributor to GDP growth in the quarter, rising 0.7 percent off the back of a subdued result in the March 2019 quarter.” More>>

ALSO:

Pickers: Letter To Immigration Minister From Early Harvesting Growers

A group of horticultural growers are frustrated by many months of inaction by the Minister who has failed to announce additional immigrant workers from overseas will be allowed into New Zealand to assist with harvesting early stage crops such as asparagus and strawberries. More>>

ALSO:

Non-Giant Fossil Disoveries: Scientists Discover One Of World’s Oldest Bird Species

At 62 million-years-old, the newly-discovered Protodontopteryx ruthae, is one of the oldest named bird species in the world. It lived in New Zealand soon after the dinosaurs died out. More>>

Rural Employers Keen, Migrants Iffy: Employment Visa Changes Announced

“We are committed to ensuring that businesses are able to get the workers they need to fill critical skills shortages, while encouraging employers and regions to work together on long term workforce planning including supporting New Zealanders with the training they need to fill the gaps,” says Iain Lees-Galloway. More>>

ALSO:

Marsden Pipeline Rupture: Report Calls For Supply Improvements, Backs Digger Blame

The report makes several recommendations on how the sector can better prevent, prepare for, respond to, and recover from an incident. In particular, we consider it essential that government and industry work together to put in place and regularly practise sector-wide response plans, to improve the response to any future incident… More>>

ALSO: