NZ: Larger than expected trade surplus in June - Westpac

Michael Gordon, analyst at Westpac, notes that New Zealand recorded a $365m trade surplus in June and the result was stronger than forecast, due to a bigger drop in imports than expected.

Key Quotes

“Seasonally adjusted exports were close to flat for the month. Dairy exports were down sharply due to lower volumes, reflecting the drop in milk production during the dry late summer. Exports were also down slightly for meat, logs and fruit, but were up in other areas.”

“Seasonally adjusted imports fell by 4%. Oil import volumes were down sharply after a jump in May. Imports of capital equipment were broadly flat, continuing their recent trend.”

“The annual trade deficit improved further to $4.9bn, having peaked at $6.7bn in February this year. We expect only a modest improvement from here, with the rise in dairy export prices now having largely been passed through. The recent plunge in export log prices will also weigh on the trade figures in the coming months.”