KEY POINTS:
Rising petrol prices and falling prices for exports of chemicals and aluminium kept the rise in New Zealand's terms of trade for the June quarter to a modest 0.6 per cent, figures published today by Statistics New Zealand (SNZ) show.
Still, New Zealand's terms of trade index rose to its highest level since the June quarter of 1974, just before the first oil price shock.
The rise in the index to 1124 was the result of import prices falling more than export prices, SNZ said.
The merchandise export price index fell 1.2 per cent, the fourth consecutive quarter in which export prices have fallen, while the merchandise import price index fell 1.7 per cent.
The figures are a surprise, with the medians from economists polled by Reuters predicting for a 4.4 per cent rise in the terms of trade for the quarter, and a 2.2 per cent rise in the export price index.
The movement in import prices was more as expected, though the economists' median prediction was for a 2.2 per cent fall.
SNZ said the most significant contribution to the fall in export prices was a 2.9 per cent drop in the non-food manufactures index, due to lower prices for chemicals and related products, and aluminium.
For import prices, the fall was partly offset by a 3.1 per cent rise in the petroleum and petroleum products index. The main contribution to the decrease was a 5 per cent fall in the mechanical machinery index and a 3 per cent fall in the transport equipment index.
Seasonally adjusted merchandise export volumes rose 0.4 per cent in the June quarter, the third of the past four quarters to have recorded an increase, SNZ said.
Non-food manufactures and non-fuel crude were the main contributors to the rise, almost offset by a fall in the food and beverages index.
Seasonally adjusted merchandise import volumes rose 3.3 per cent in the quarter, mainly due to higher volumes of capital goods.
But the consummption goods index fell 4.2 per cent in the quarter, the first fall in the past year. All consumption goods sub-indexes fell for the first time since the September 1998 quarter, SNZ said.
Despite strong dairy prices on world markets the export price index actually fell 2.4 per cent from a year earlier, although it rose 3.4 per cent from the previous quarter.
Compared with the same quarter last year, the terms of trade index rose 10.3 per cent.
- NZPA
