New Zealand's exports are more diversified and its manufacturers more competitive than they are given credit for, the New Zealand Institute of Economic Research says.
The United Nations' trade classification system recognises over 5000 different product groups. In 2007 New Zealand had at least some exports in more than 2000
of those categories.
It showed firms had overcome challenges of size, distance and other barriers to export a diverse range of products, the institute said.
Among the 2000 product groups New Zealand had a comparative advantage in 611. A country has a comparative advantage in a good if that good makes up a larger share of the country's exports than it does of world exports. The higher the ratio, the greater the comparative advantage.
The 611 product groups in which New Zealand had an advantage were spread across nearly all the major tradeable goods sectors. There were almost as many in the machinery and electrical goods sector, for example, as in livestock products, though the degree of comparative advantage tends to be higher among food and agricultural products.
Had the exchange rate been lower in 2007 there would have been more products with comparative advantage, the institute said, especially among non-food manufactured goods.
"The high exchange rate tends to squeeze out non-food manufacturing exports and force the economy back on to its reliance on food and agriculture, thereby reducing diversity," the institute said.
