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NZ-US Trade Flows Show Impact Of COVID-19 But Underlying Resilience

NZUS Council executive director, Jordan Small said today the latest quarterly data on New Zealand’s trade with the United States looks bad but underneath the headline number is resilience in high value exports that bodes well for a future beyond the pandemic.

"Month to month goods export data are volatile because of massive disruption in shipping and supply chains and NZUS Council members are reporting it is an ongoing problem, and a lot of effort is needed to sustain customer relationships while borders remain closed," Mr Small said.

The NZUS Council today published NZ-US Trade Flows - March Quarter 2021 Report based on the latest goods and services trade figures.

"The headline figures for the quarter ending March 2021 represent the impact of COVID-19 with an overall fall in goods and services exports to the US by 13.4% driven by massive drops in travel and tourism (-79%), and declines across many of our major export categories.

"Positively the data shows the great resiliency in our goods and our commercial services trade relationship which is crucial to New Zealand’s economic recovery from the pandemic."

The key takeaways from the data are:

Services exports are down, led by an obvious and massive fall in tourism and travel.

Trade in commercial services, the fruits of New Zealand’s growing weightless economy, have held up and are continuing to grow.

Goods trade is being hit by shipping and supply chain disruptions with month to month volatility, but underlying demand remains strong."

"As New Zealand exporters seek to diversify their markets the US is one of the key markets for goods exporters.

The US is likely to remain the largest market for wine and beef exporters over the coming 12 months. And for food exporters more generally high value market segments like food service for restaurants and hotels are starting to return now that 70% of adult Americans are vaccinated and can dine and gather together outside the home.

"This recovery will provide a boost for New Zealand exporters and will supplement the hard work they have done developing new channels such as online direct to consumer sales.

"The NZUS Council Trade Dashboard’s quarterly data analysis dramatically shows the impact of closed borders. Travel and tourism is down 79% which is more than $1B fall compared to the last year This reversed a five-year trend of services export growth outpacing goods exports to the US.

"The growth story for the quarter is technology and intellectual property exports to the US. Computer software grew +22.8%, computer software licences by +6.6%, R&D by +2.3%, and architectural, scientific and engineering services by +194%. For the last five years these have been New Zealand’s fastest growing exports."

"The NZUS Council supports the Prime Minister’s commitment and advocacy for an enhanced trade relationship with the US and supports her call for increasing export market diversification. The high value US market presents a significant opportunity for diversification particularly for added-value exporters.

"For New Zealand’s highest value services and goods exporters the market has grown consistently, and our latest reports shows that we can expect that growth to continue," Mr Small said.

© Scoop Media

 
 
 
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