Trade figures show some positive trends

While many countries are facing a plunge in exports because of the global recession, New Zealand is holding up, with a better than expected trade surplus of $324 million in March.

The March quarter trade deficit of $65m was the smallest trade shortfall for seven years.

Monthly exports topped $4 billion for the first time ever in March, according to Statistics New Zealand figures, up almost 18 per cent on the same month last year.

The monthly figures were boosted by sales of meat during the normal seasonal cull and the sale of an aircraft for about $130m.

Economists warned that the global recession meant an export-led recovery would be difficult.

Imports also rose in March, up 6.9 per cent because of increased imports of machinery and equipment, with a big one-off of wind turbines. Consumer goods imports are also holding up, although car imports keep falling.

Deutsche Bank chief economist Darren Gibbs said the trade report showed the resilience of New Zealand's exports, helped by higher volumes of commodities in part bouncing back from last year's drought.

Prices were holding up for some commodities and exports were being supported by a much lower kiwi dollar than a year ago.

ASB Bank economist Jane Turner said export values were supported by strong volumes of commodity goods, but that was likely to be masking the weakening demand internationally for our goods.

That was shown in weaker prices for commodities such as dairy products.

New Zealand was also likely to see lower manufacturing exports this year.

"The global nature of the economic recession will limit New Zealand's ability to stage an export-led recovery," Ms Turner said.

The recent strength in the kiwi dollar against the US dollar had also posed a challenge.

Monthly figures can bounce around because of one-off factors, but the March quarter figures also looked resilient. For the quarter, imports of cars and oil dropped dramatically, while exports have dipped only slightly in the past three months, down 4 per cent.

That left the trade deficit for the March quarter at just $65m, the lowest level since 2002.

Statistics New Zealand said the March quarter's figure follows five years of quarterly deficits that have generally been above $1b. The low deficit was the result of a record dive in imports, coupled with a smaller fall in exports.

The value of seasonally adjusted exports fell 4 per cent ($449m) in the March quarter.

This drop was driven by a price-led fall in milk powder, butter and cheese exports, and falls in crude oil, and aluminium and aluminium articles, for which both quantities and prices decreased.

The value of seasonally adjusted imports recorded its largest ever fall in the March 2009 quarter, down 12.8 per cent ($1.6b) compared with the December 2008 quarter.

The fall was led by a $1.3b drop in intermediate goods, as falling crude oil prices coincided with a drop in the quantity of oil imported.

Car imports also fell, down $195m, with the March 2009 figure representing less than half of the March 2008 value.

- © Fairfax NZ News