The value of New Zealand exports rose 12 per cent last month, according to the latest monthly trade figures released this morning.
A 32 per cent hike in the value of milk powder, butter, and cheese exports were the main contributor, said Statistics New Zealand.
The total value of goods exported for July 2010 was $3.6 billion, up $394 million from July 2009.
"Milk powder, butter, and cheese exports were up $179 million or 32 per cent, and led this increase," overseas trade manager Neil Kelly said.
Increased boat exports and forestry products were also signficant contributors to the increase.
Kelly said the trend for merchandise exports had been growing strongly since September 2009 and is now at a similar level to its previous peak in late 2008.
ASB economist Jane Turner said the trade balance "underwhelmed the market slightly, with growth in exports beginning to slow."
"Recent commodity price data point to prices in dairy beginning to ease of high levels, which will reduce support for the trade balance over the next year," said Turner.
"In addition, there have been tentative signs that forestry demand has eased (although prices remain firm), while manufacturing confidence has eased off recent highs. While we continue to expect an export-led recovery over the next year, it appears growth in the key drivers may be starting to slow slightly."
ANZ economist Mark Smith said the "uneven nature of the global expansion remains evident".
Exports to China rose by 7.5 per cent in seasonally adjusted terms to be 28 per cent up on a year earlier. While exports to Australia fell in July, they had increased by 6 per cent in the last three months. Encouragingly, said Smith, exports to Europe rebound after a few weak months, increasing by 8.4 per cent, although exports to the US plummeted by 15.6 per cent reflecting softer US outlook.
"It is noticeable that merchandise exports to emerging economies are now playing a much more influential role in export performance, with share of exports to OECD countries having plummeted to under 50 per cent of exports as opposed to slightly more than 71 per cent in 2000 and closer to 80 per cent in the early 1990s," said Smith.
"This, and the strong performance of the Australian economy is likely to provide temporary insulation from the chill coming from the US and other major developed economies."
The total value of goods imported for July 2010 was $3.8 billion, up $402 million (12 per cent) from July 2009. Petroleum and products, passenger cars, and fertiliser were the leading contributors to this increase.
The trend for total merchandise imports has now risen for 10 consecutive months, but is still 13 per cent lower than its peak in September 2008.
The trade balance was a deficit of $186 million, or 5.2 per cent of the value of exports. As for July 2009, the current deficit is much lower than the average July deficit for the five years before July 2009 - 24 per cent of total exports.
- HERALD ONLINE