Trade surplus despite export fall

CATHERINE HARRIS
Last updated 14:30 27/06/2013

Relevant offers

Industries

Real-world benefits of gigabit broadband may start off small Coffee prices could increase due to drought in Brazil New Zealand to welcome a record number of cruise ships this summer Collapsed firm Mainzeal owes $120 million to creditors, legal proceedings continue against firm directors How they make it: Carpet making at Cavalier New World Little Garden Trade Me auction hits $200 ASB manager's 'sxy' dismissal unfair - but he was the author of his own misfortune Sales Concepts pleads guilty to false Christmas delivery promise Air France workers on trial over ripping off bosses' shirts Gough family forced to cut rent on Christchurch heritage building

The drought took a toll on New Zealand's trade balance last month, with a fall in exports, particularly meat, producing a much smaller surplus than analysts expected.

There was a trade surplus of $71 million in May, well below the consensus forecast of $427m, and exports dropped a seasonally adjusted 2.7 per cent to $4.08 billion.

As a result, New Zealand's trade deficit widened to $869m from $694m in April.

The surplus was surprisingly small for a May, and economists placed much of the blame on the drought.

Meat exports dropped 18 per cent by value, a result of farmers being forced to send their stock to the works earlier than usual.

"We expect a reversal in the June data," Westpac said.

Another probable reason for meat volumes being down was the certification issues in China that held up meat at the wharves, Christine Leung, of ASB, said.

"With the debacle resolved at the end of May, we expect to see a slight recovery in meat export volumes over the coming months as the backlog is cleared," she said.

The bright spot on May's export scene was China, which received 30 per cent more goods year-on-year, largely in logs.

New Zealand imported fewer goods last month.

The value of imports fell 3.9 per cent to $4.01b, driven largely by declines in avgas, petrol and machinery.

Economists expect a pick-up in exports and domestic demand.

Exporters were set to get a boost from a lower New Zealand dollar and rising commodity prices, and manufacturers could expect an upturn in domestic demand through the Canterbury rebuild.

However, the rebuild would also increase demand for imports from the end of the year, Westpac said.

"We expect trade deficits to persist from that point," it said.

Ad Feedback

- BusinessDay.co.nz

Special offers

Featured Promotions

Sponsored Content