The trade deficit widened to $963 million in October 2015, compared with a deficit of $892 million for the same period last year, Statistics New Zealand said today. Exports fell more than imports.
Total goods exports fell to $3.8 billion, down 4.5 per cent from October 2014. Milk powder, butter, and cheese led the fall, down $202 million from October 2014. Goods imports fell $109 million (2.2 per cent), led by falls in petrol and avgas, and capital goods.
Goods exports to China rose $57 million (9.2 per cent), to move China ahead of Australia as NZ’s top annual export destination. The rise in exports to China this month was led by beef, milk powder, and kiwifruit. Goods exports to Australia fell $66 million (down eight per cent), driven by crude oil which fell $60 million.
The rise and fall of dairy exports has been driven by demand from China, and is reflected in NZ’s total exports to China. China became the top export destination in November 2013, but fell below Australia from March to September 2015. However, China is now both NZ’s top export destination for goods, and NZ’s top source of imports. Although milk powder exported to China fell 65 per cent for the year ended October 2015, it is still the largest commodity. Smaller exports such as beef and fruit have doubled in value in the past year.
“Since annual exports to China fell from their peak in 2014, exports to China and Australia have been around $8.4 billion each,” international statistics senior manager, Jason Attewell said. “Annual exports to Australia peaked in January 2012 but have been generally falling since, due to lower crude oil exports.”
According to Michael Gordon, senior economist at Westpac, the trade deficit is in line with market expectations. “The trade balance is typically at its lowest around this time of year; in seasonally adjusted terms, the deficit widened slightly to $445 million,” he said.
“Exports were little changed from September. Lower prices for dairy and wood exports were partly offset by a rise in volumes, and there were declines in meat, seafood and machinery. Exports of fruit and wine rose for the month.
“Imports were held up by a price driven jump in petroleum imports. Excluding petroleum, the value of imports was down two per cent. There were no large plane imports in October, but these are likely to feature in the import bill over coming months.”
This release focuses on NZ’s goods trade. Goods made up 80 per cent of total goods and services exports to China and 95 per cent of total imports from China for the year ended June 2015. Goods and Services Trade by Country: Year ended September 2015 will be available on December 2 2015.
