KEY POINTS:
New Zealand had a $223 million trade deficit in June, a better performance than economists had predicted.
The deficit for the June year was also lower than expected at $4.48 billion - 11.2 per cent of exports.
Economists in a Reuters poll had expected an annual deficit of $4.8b and a June month deficit of $500m.
Both imports and exports were above expectations in the month of June, with imports up 16.9 per cent on a year earlier at $3.81b and exports up 30 per cent to $3.59b.
The rise in exports was the largest percentage increase from the same month of the previous year since January 2001.
Releasing the figures, Statistics New Zealand (SNZ) said crude oil dominated the increase in June month exports, up $261m from June 2007, while imports for petroleum and products were up $342m to $809m, led by crude oil.
The second-largest contribution to the June month increase in imports was from salt, earths, stone and cement, which was up $52m. The largest offsetting decrease was due to the frigate HMNZS Canterbury having been imported in June 2007.
For the ninth month out of the last 10, the increase in monthly exports was dominated by crude oil and milk powder, butter and cheese, up a combined $490m.
Meat and edible offal exports were up $102m in June, driven largely by an increase in frozen boneless beef cuts.
ASB economist Jane Turner said the data provided reassurance that a trade balance recovery was well under way.
"Imports have been bolstered by temporary one-off items and high oil prices. The underlying weakness in demand and a correction in oil prices should see import growth moderate over the next year."
SNZ said the 8.1 per cent increase in the value of imports to $44.5b for the June year was led by a $1.3b increase in petroleum and products, followed by mechanical machinery and equipment which was up $650m.
The largest offsetting decrease was from aircraft and parts, down $397m.
The 14.6 per cent increase in the value of exports to $40b in the year to June 2008, from the previous June year, included a $2.3b increase in milk powder, butter and cheese, which accounted for 21.9 per cent of all exports.
Logs, wood and wood articles, which was down $203m, was the largest offsetting decrease for the June year, followed by aluminium and aluminium articles with a decrease of $106m.
The $4.48b June year trade deficit was down from a $4.8b deficit in the May year and down from $6.2b in the June 2007 year.
The annual value of New Zealand's exports to Australia was now greater than the value of imports from Australia, following 13 years during which New Zealand was generally a net importer.
For the June quarter, there was a seasonally adjusted trade deficit of $1.9b, following a deficit of $861m in the March quarter, SNZ said.
Major factors contributing to the increased deficit included a jump in imports of one-off capital goods, particularly oil-related, and petroleum products.
There was also a large seasonally adjusted drop in dairy exports.
- NZPA
