NZ Import & Export Stats (July 2020 Release) – Trade Surplus

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New Zealand has recorded its fifth consecutive monthly trade surplus with the annual deficit falling to its lowest level in nearly six years.

Official figures from Stats NZ show a trade surplus of $426 million for June, taking the annual deficit down to $1.2 billion, the lowest since late 2014.

Imports were up slightly in June 2020 mainly due to the arrival of the HMNZS Aotearoa, Stats NZ said today.

June imports included the naval vessel Aotearoa, which arrived in Auckland from Ulsan, South Korea, on 26 June. See HMNZS Aotearoa – A11 for more information about this vessel.

The value of total merchandise goods imports was little changed compared with June 2019, up $11 million (0.2 percent) to $4.6 billion in June 2020. A rise in imports of ships and boats was largely offset by continued falls in the imports of cars and other vehicles, as well as fuel.

“The arrival of the Navy’s newest and biggest ship has buoyed import totals for June,” international statistics manager Darren Allan said.

Excluding the large one-off import, the value of total goods imports in June 2020 was $4.2 billion, a fall of $384 million (more than 8 percent) from a year earlier.

“Without the Aotearoa, imports fell for the third consecutive month, following the start of the COVID-19 alert level 4 lockdown in New Zealand at the end of March,” Mr Allan said.

The biggest fall in imports in June 2020 was vehicles and parts. Car imports (new and used) fell $189 million; trucks and vans fell $67 million.

While imports of vehicles fell, registrations of cars bounced back in June 2020 to similar levels when compared with the same month last year. Imports of vehicles had a large fall in April 2020 amid the COVID-19 lockdown. See Transport vehicle registrations: June 2020 – Infoshare tables.

“The latest vehicle registration numbers indicate sales of vehicles may be recovering,” Mr Allan said.

“Given the continued low imports of vehicles, it seems the car sales are of existing stock, after demand fell during the lockdown period.”

The second largest fall in goods imports was in petroleum and products, down $217 million. Crude oil fell $215 million (66 percent), down in both quantity and price.

Imports down from US, up from China

Of New Zealand’s main trading partners, imports from the United States of America had the biggest fall in June 2020, down $111 million when compared with June 2019. Mechanical machinery and equipment (such as turbo-jet and turbo-propeller parts) led the fall, down $58 million (41 percent).

“With ongoing travel restrictions and international arrivals at a 61-year low, there’s less need for imports of aircraft parts,” Mr Allan said.

International arrivals in May lowest in 61 years has more information on traveller arrivals in May 2020.

Goods imports from China were up $97 million (10 percent) in June 2020 when compared with June 2019. The leading rises were electrical machinery and equipment (such as mobile phones) up $45 million, articles of plastic (such as disposable aprons) up $27 million, and textiles (such as face masks) up $23 million.

Total exports rise led by dairy

Higher milk powder exports and a recovery in log exports helped boost total exports in June 2020, up $107 million to $5.1 billion from June 2019.

Leading the rise was New Zealand’s biggest export commodity group, milk powder, butter, and cheese, up $90 million to $1.2 billion from last June.

Milk powder rose $108 million to reach $650 million, which was partly offset by a fall in milk fats including butter, down $38 million.

In contrast to the falls in previous months, quantities and values of log exports in June 2020 were up on June 2019, up 8.8 percent and 7.0 percent, respectively.

“Log exports slumped in April, when harvesting in New Zealand stopped as a non-essential service during the COVID-19 lockdown,” Mr Allan said.

“In contrast, quantities and values in June exceeded those of the same time last year.”

COVID-19 continues to impact on exports of breathing equipment, with increased ongoing need for respiration apparatus during the global pandemic. Exports of respiration equipment rose $44 million (123 percent) when compared with June 2019.

Monthly trade balance surplus in June

The monthly trade balance for June 2020 was a surplus of $426 million. Excluding the new vessel Aotearoa, the trade balance surplus was $821 million.

ASB senior economist Mark Smith expected the current pattern of solid demand for exports and reduced imports to continue in the near term.

“We expect a period of very low annual trade deficits, and potentially trade surpluses, over the year ahead.”

“The environment for trade, however, will likely remain difficult as the global economy grapples with a global pandemic and the surfacing of increasing protectionist sentiment,” he said.

The strength of exports, particularly agricultural products, are expected to support economic activity this year and go some way to offsetting the loss of overseas tourists and students.

SOURCE: Stats NZ

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