NZ: Oct trade deficit narrowed to $871m - Westpac

Michael Gordon, Research Analyst at Westpac, explains that a strong lift in both exports and imports in October, with a large aircraft import has boosted the New Zealand’s trade deficit.

Key Quotes

“New Zealand's trade deficit narrowed to $871m in October. Excluding the import of a large aircraft, the result was close to our forecast of a $600m deficit.”

“In seasonally adjusted terms, export earnings rose by 5% for the month. Meat exports rebounded strongly after two weak months, and there was a strong lift in log exports. Dairy exports were little changed.”

“Seasonally adjusted imports rose by 7% in October, topping $5bn for the first time. This included the import of an aircraft worth $257m. The timing of these kinds of large import items is difficult to predict, and they add significant volatility to the monthly trade balance. There was also a strong pickup in imports of plant and machinery equipment.”

“We expect some improvement in the trade balance over the next year. Dairy export volumes have been held back by poor weather in the early part of the dairy season. But with milk collections now up on last year's pace, we expect this to flow through into stronger export shipments by early next year.”