September trade deficit smallest since 2002

New Zealand's trade deficit in September was well below expectations at $587 million, or 20.8 per cent of exports.

Respondents to a Reuters poll had been picking a range for the deficit of $600 million to nearly $1.1 billion, with a median of $820 million.

Releasing the data today, Statistics New Zealand (SNZ) said the deficit was the smallest for a September month since 2002.

The trend for the trade balance showed a deficit that had been decreasing since August 2005 and was now back at a level last seen during the second half of 2004.

Last month merchandise exports were valued at $2.8 billion, almost half a billion dollars higher than September 2005, and the highest ever for a September month.

But imports, at $3.4b, were also the highest for a September month.

Seasonally adjusted values showed that the September 2006 quarter was the fourth consecutive quarter in which exports had increased, and the eighth during which imports had increased.



The monthly shortfall pushed the September year deficit to $6.164 billion, compared to the Reuters survey median expectation of $6.435 billion.

Seasonally adjusted crude oil imports were up 18.7 per cent in the September quarter, but that followed a decrease of 14.9 per cent in the previous quarter, SNZ said.

Crude oil is imported in large, irregular shipments and does not show a stable seasonal pattern.

Petrol and avgas, also imported in irregular shipments, rose 8.2 per cent on the previous quarter, SNZ said.

Over the same period there was a 1.2 per cent increase in consumption goods.

For the third consecutive quarter, capital goods was the broad category with the largest seasonally adjusted import reduction.

Both sub-categories dropped, with transport equipment down 3 per cent, following 23.4 per cent and 17.8 per cent drops in the previous two quarters, while machinery and plant was down 2.5 per cent.

Seasonally adjusted exports of meat and edible offal were up 10.6 per cent in value on the June quarter, although volumes were up just 2.3 per cent.

The value of fruit exports was up 23.7 per cent in the September quarter, while volumes were up 21.8 per cent.

Kiwifruit provided most of the increase.

Offsetting the increases, milk powder, butter and cheese were down 3.5 per cent on the previous quarter, following a 22.1 per cent increase in the June quarter.

- NZPA