Data Flash (New Zealand)
Overseas Merchandise Trade - February 2001
A merchandise trade surplus of $379m was recorded in February, slightly weaker than the provisional surplus of $413m
reported on 27 March.
The average surplus in February over the past five years is $151m. Statistics NZ note that this month's result
represents the first February since 1995 that the surplus has exceeded 10% of exports.
The trade deficit for the year to February was $1,123m.
The value of exports for the three months to February was 23.2% higher than a year earlier. With export prices estimated
to be running at around 19% higher than a year earlier, today's outcome suggests that export volumes are expanding at an
annual rate of around 4-5%.
As the table below shows, growth in dairy exports continues to run around 40% ahead of year earlier levels in February.
Exports of machinery equipment rose 8% compared with last February while exports of aluminium were unchanged - both
growth rates were lower than their three month average. The slowdown in exports of manufacturing goods likely reflects
the impact of weaker trading partner growth. Exports of forest products were 7% weaker than a year earlier, probably
reflecting lower demand from Australia and Korea.
The value of imports was unchanged from the earlier estimate published on 27 March. ? The estimated level of imports for
the three months to February was unchanged from a year earlier. Excluding `lumpy' imports of capital transport and
military equipment, `core' imports for the 3 months to February were 12.2% higher than a year earlier. We estimate that
import prices are running a little over 10% higher than a year earlier, implying that core import volumes are broadly
Commentary The final outcome for February was just a little weaker than the provisional outcome which, in turn, was
much better than the market had expected, with the surprise due largely to weaker than expected imports - the opposite
outcome to that in January.
As the chart below shows, the monthly trade balance has improved markedly in recent months. We expect the annual trade
balance (on a merchandise trade basis) to move into positive territory by mid year for the first time since 1995.
Therefore, although we foresee further moderation in export growth over coming months, the improving trend in the
current account deficit remains intact. As a result, we expect that annual current account balance to decline to around
4.5% of GDP in Q1 2001 and to between 3 and 4% of GDP over the coming year.
Darren Gibbs, Senior Economist, New Zealand