5. Trade deficit widens to 10 year high

Shipping containers piled up at Tauranga Port. Photo by Lynn Grieveson

Rising demand for imported goods pushed New Zealand's trade balance to its widest deficit for a June year in a decade, Stats NZ reports.

The country's annual trade deficit widened to $4 billion in the June year, from a deficit of $3.66 billion a year earlier, Stats NZ said. Annual imports increased by $6.02 billion to $59.55 billion, while exports rose by $5.65 billion to $55.52 billion.

“The last June year surplus was in 2014, driven by high dairy export values,” acting international statistics manager Dave Adair said. “Exports dipped in 2015 leading to a deficit, which has widened since due to steadily rising imports.”

The latest rise in annual imports was led by $24 billion of intermediate goods, up $3 billion from the year earlier, the statistics agency said. Petroleum and products, excluding petrol, led the intermediate goods rise, up by $850 million. This was followed by parts of transport equipment, up $416 million, and parts of plant and machinery, up $413 million.

The value of exports in June rose $217 million to $4.91 billion, led by a $58 million increase in the value of meat and edible offal exports as lamb exports to China rose $26 million. Kiwifruit and preparations of milk, cereals, flour, and starch also contributed to the exports rise.

The export gains were partly offset by an $84 million decline in the value of milk powder, butter, and cheese exports in the month to $1.12 billion. Milk powder exports fell by $162 million, or 25 percent, as the quantity dropped 32 percent due to falls across a range of key markets, including large falls to Algeria and China. However, milk fat exports including products like butter were up $93 million.

The monthly trade balance was a deficit of $113 million, compared with a surplus of $243 million in June last year and only the second deficit for a June month in the last decade.