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


NZ's trade deficit narrowed, net exports remain

New Zealand's trade deficit narrowed, but net exports to remain a drag

Trade deficit narrowed to NZ$942 million

Export and import growth slowed

Net exports to remain a drag on GDP growth

New Zealand's trade deficit narrowed to NZ$942 million in October (JPMorgan and consensus -NZ$1000 million), after blowing out in September to a revised deficit of - NZ$1.26 billion (previously NZ$1.18 billion), the largest deficit this year. The annual trade gap widened to NZ$5.21 billion, again the widest this year, from NZ$5.05 billion.

Exports were up 13.8%oya in October, compared to 8.3% previously, possibly buoyed by the fall in NZD, which shed 14% vis-Ã -vis the US dollar in October. According to Statistics New Zealand (SNZ), crude oil exports (+3.5%oya) have returned to levels similar to those seen in the second half of 2007 as the Tui oil field completed it first full year of operation in July 2008. Exports of milk powder, butter and cheese also grew strongly, rising 14%oya in October, as did exports of meat and edible offal, up 31%.

Imports grew 15.3%oya in October, slowing from 26.6% in the previous month, reflecting the significant slowdown in domestic demand. In value terms, however, imports rose to NZ$4.8 billion, the highest value for any month, owing mainly to higher oil shipments. Imports of petroleum and products surged 70%oya, with crude oil the largest contributor, according the SNZ. The statistics agency also reported that the value of passenger motor car imports fell to an eight-year low; vehicles, parts and accessories were down 4.5%oya in October.

The trend in imports and exports has eased in recent months, and should continue to do so. Weakening global demand and falling commodity prices mean exports will slow considerably. On our forecasts, net exports will be a drag on economic growth over the remainder of 2008 and in 2009, even though NZD depreciation will boost exporters' competitiveness. Imports, meanwhile, will continue to weaken as domestic demand flags amid the deteriorating housing market and loosening labour market conditions. Aggressive policy easing by the RBNZ, though, should cushion the blow to some extent.

See... Full release with charts (PDF)

© Scoop Media

Business Headlines | Sci-Tech Headlines


BusinessNZ: Third Snapshot Report Reveals $9.5 Billion Business Investment In Climate Action

Signatories to the Climate Leaders Coalition have committed to invest $9.5 billion over the next five years to reduce emissions from their businesses, as revealed in their third anniversary snapshot report released today... More>>

Digitl: The home printer market is broken
Printers are more of a security blanket that a serious aid to productivity. Yet for many people they are not optional.
Even if you don’t feel the urge to squirt ink onto dead trees in order to express yourself, others will insist on printed documents... More>>

Serious Fraud Office: Commences Enquiries Into Allegations Of COVID-19 Wage Subsidy Fraud
The Serious Fraud Office has commenced a number of enquiries into alleged abuse of the Government’s COVID-19 Wage Subsidy. Director Julie Read said the allegations relate to multiple complex cases of potential fraud that have been referred to the agency following extensive investigations ... More>>

ComCom: Companies In Hot Water For Selling Unsafe Hot Water Bottles And Toys

A wholesaler and a retailer have been fined a total of $140,000 under the Fair Trading Act for selling hot water bottles and toys that did not comply with mandatory safety requirements. Paramount Merchandise Company Limited (Paramount) was fined $104,000 after pleading guilty in the Manukau District Court... More>>

Reserve Bank: Robust Balance Sheets Yield Faster Economic Recovery

Stronger balance sheets for households, businesses, financial institutions and the government going into the pandemic contributed towards maintaining a sound financial system and yielding a faster economic recovery than following previous deep recessions... More>>

Transpower: Releases Independent Report Into Events Of August 9
Transpower’s Chief Executive Alison Andrew has today released an independent report into the grid emergency of August 9 when insufficient generation was available to meet demand, leading to some customers being disconnected... More>>