KEY POINTS:
New Zealand posted a lower than expected trade surplus of $9 million in May.
The median prediction of economists in a Reuters poll had been for a surplus of $75 million.
The result left the annual trade deficit at $5.87 billion, Statistics New Zealand (SNZ) figures released today show. The prediction had been for a deficit of $5.83 billion.
Merchandise imports in May were worth $3.34 billion, down $412 million or 11 per cent on May 2006.
But the year ago figures were affected by the import of a $235m aircraft, while imports of petroleum and products were at an all time high that month, SNZ said.
If the effect of those large irregular components was removed from both months, the result for last month was a $72m increase in imports.
May exports were valued at $3.35 billion, down $287m or 7.9 per cent on May 2006 when three large items with a combined value of $245m were exported.
Removing the effects of those large irregular components would have resulted in a $42m decrease in exports, SNZ said.
May months typically had a surplus, and despite last month's drop from a year earlier, May 2007 had the third-highest exports value on record for any month.
But last month was also the first time since February 2006 that monthly export figures had been below those for the same month a year earlier.
SNZ said imports in May were up $29m for the vehicles, parts and accessories group to its highest monthly value since December 2005, while the electrical machinery and equipment group was up $23m.
The largest contributors to those groups were new petrol cars with engines above 3000cc and mobile phones, respectively.
Among exports the meat and edible offal group was down $78m, with the major contributors being a $38m fall in frozen beef cuts and a $26m fall in frozen lamb cuts.
The butter and cheese group also fell, down $31m from May 2006, but still recorded its second-highest value of the past five years.
SNZ said the $5.87b trade deficit for the May year equated to 16.7 per cent of exports and was a decrease from a $6b deficit in the April year.
It was also down on the $6.9b deficit in the May 2006 year but larger than the $5.1b deficit in the May 2005 year.
The New Zealand dollar was little moved by the data, generally trading a little lower, from above US76.60c to around US76.45c within 45 minutes.
Goldman Sachs JBWere economist Shamubeel Eaqub said it appeared as if both exports and imports were slowing at quite an aggressive pace.
"Certainly it feels like the Reserve Bank's tightening is taking hold with both slowing in consumption and intermediate goods, and also severely impacting on exports."
Deutsche Bank chief economist Darren Gibbs said it was always difficult to read too much into monthly data.
"If you look at the consumption figures, consumer imports were down 1 per cent year-on-year -- maybe some signs of slowing there, although last May was a particularly high benchmark to compare against."
ASB Bank economist Daniel Wills said a point of turnaround in the trade picture may have been reached, but it was going to be slow progress, until the consumer started reining in a little more.
He saw no extra impetus in the data for the Reserve Bank to raise interest rates further, but not much relief for them either.
- NZPA
