Australia, USA Remain NZ's Top Investment Partners
Balance of Payments and International Investment Position (Additional Information on International Investment): Year ended 31 March 2005
Australia and USA Remain New Zealand's Top Investment Partners
Australia and the United States of America (USA) continue to be New Zealand's top two investment partners, Statistics New Zealand said today. These two countries combined contributed 53.0 percent of New Zealand's total investment abroad, and 44.7 percent of foreign investment in New Zealand, at 31 March 2005. The United Kingdom (UK), Germany and Singapore continue to be significant investment partners, although foreign investment in New Zealand by UK investors fell $7.8 billion at 31 March 2005, compared with 31 March 2004.
Total foreign investment in New Zealand at 31 March 2005 was $224.1 billion, up $21.9 billion (10.8 percent), from a year ago. Of this increase, increased investment by Australian investors accounted for $6.7 billion.
Foreign investment in New Zealand by UK investors, at 31 March 2005, contributed 14.0 percent ($31.5 billion) of total foreign investment in New Zealand, down from 19.4 percent ($39.2 billion) a year ago. This withdrawal of investment was more than offset by increased investment from the USA. Investment in New Zealand by USA investors was up $9.0 billion, contributing 18.2 percent at 31 March 2005 compared with 15.7 percent a year ago.
The value of New Zealand's investment abroad was $98.0 billion at 31 March 2005. The main destinations for New Zealand's investment abroad continued to be the USA (with $26.4 billion or 26.9 percent of the total) and Australia (with $25.5 billion or 26.1 percent). Germany ($10.4 billion) and the UK ($7.4 billion) were also significant destinations for New Zealand's investment abroad.
There were increases in the value of New Zealand's investment to Australia, Germany, the USA and the UK, between 31 March 2004 and 31 March 2005. These increases contributed to the $7.8 billion rise in total New Zealand investment abroad. The proportions of investment to these countries remain relatively unchanged.
@ Australia, our number one investment partner, accounted for over 25 percent of both New Zealand's investment abroad and foreign investment in New Zealand at 31 March 2005. However, the proportion of Australian investment to total foreign investment in New Zealand is much the same as it was one year ago.
Direct investment relationships (those where there is ownership of 10 percent or more) are a key feature of investment between New Zealand and Australia. Of New Zealand's $25.5 billion total investment in Australia at 31 March 2005, 38.6 percent ($9.8 billion) was direct investment in Australia. On the same date, 59.3 percent of the total Australian investment in New Zealand of $59.4 billion was direct investment. The banking sector contributes significantly to New Zealand's investment relationship with Australia.
Statistics showing the New Zealand industries that have international financial assets and liabilities were also released today. The finance and insurance industry continues to hold the largest proportion of New Zealand's overseas assets (63.1 percent), and also the most significant proportion of overseas liabilities (59.5 percent). While this industry holds a similar proportion of New Zealand's overseas assets as it did a year ago, the proportion of overseas liabilities is up from 55.0 percent at 31 March 2004. This increase reflects the higher level of borrowing by New Zealand banks to finance increased domestic borrowing, mainly as mortgages.
New Zealand's manufacturing industry is the second most significant holder of overseas assets (16.9 percent) and also has the second largest proportion of overseas liabilities (10.4 percent). At 31 March 2005 the manufacturing industry held similar proportions of overseas assets and overseas liabilities as at 31 March 2004.