Exports holding up - for now

Photo / Kenny Rodger

An increasingly dark outlook for the global economy throws some doubt on whether this country's strong export performance can be sustained, an economist says.

Statistics New Zealand said merchandise exports were worth $3.4 billion last month, up $313 million, or 10 per cent, on August 2010. Imports were valued at $4.1 billion. The trade deficit for August was $641 million.

ASB economist Jane Turner said international prices for dairy and meat, despite having eased slightly, remained high.

"In addition, manufactured exports continue to grow," she said.

"However, the current uncertainty around the global outlook does cast a shadow over New Zealand's robust export performance. Weaker trading partner growth is likely to slow demand for some exports."

Statistics NZ said meat and edible offal, crude oil, milk powder, butter and cheese were the main contributors to the increase in August exports.

The annual trade balance for the year to August was a surplus of $1.1 billion, compared with $871 million at the same time last year.

Goldman Sachs economist Philip Borkin said continuing strength in the NZ dollar - despite it having fallen below US80c - an expected moderation in the prices of key export commodities and recovering import demand meant further trade balance improvement would be a "tough ask".

"If the annual trade balance has not peaked, we feel it is close to doing so," he said.

Deutsche Bank's Darren Gibbs said it was encouraging that imports of plant and equipment were very strong.