NZ merchandise trade reviewed - Westpac

Analysts at Westpac offered their thoughts on NZ merchandise trade for August 2017.

Key Quotes:

"Balance: -$1,235m (Westpac f/c: -$900m, Market f/c: -$825m)

Exports: $3,689m (Westpac: $3,850m, Market: $4,050m)

Imports: $4,923m (Westpac: $4,750m, Market: $4,800m)

Annual balance:  -$3,200m (previous: -$3,205m)

New Zealand recorded a larger than expected trade deficit in August. The balance usually turns negative around this time of year, due to the seasonality of our agricultural exports. But even in seasonally adjusted terms there was a marked shift, from a $147m surplus in July to a $211m deficit in August.

Much of the turnaround was due to a sharp drop in the volume of dairy exports – down 38% in seasonally adjusted terms. This is very likely to be a timing issue (dairy export volumes were unusually high in the previous two months), so we can reasonably expect a pickup in the September export figures.

Imports fell 2.9% in seasonally adjusted terms, though they were higher than expected. Petroleum imports were higher largely due to a rise in world oil prices, but imports of manufactured goods were down."