Trade surplus exceeds expectations

Exports in February increased 9.3 percent to $4.25 billion from the year earlier month, ahead of the $4.05 billion forecast by economists. Photo / NZME

New Zealand posted a bigger trade surplus than expected in February, as exports were bolstered by a $267 million drilling platform.

Statistics New Zealand said the country had a merchandise trade surplus of $339 million in February, compared with expectations for a $50 million surplus in a Reuters poll of economists. The data included the export of a large drilling platform, and excluding that item the surplus was $72 million, the agency said. The latest data compares with a $13 million surplus in January, and an $84 million surplus in February last year.

Exports in February increased 9.3 per cent to $4.25 billion from the year earlier month, ahead of the $4.05 billion forecast by economists. Ships, boats and floating structures led the gain in exports, due to the drilling platform, without which overall exports would have gained just 2.5 per cent.

Meanwhile, exports of dairy products, the country's largest commodity export group, increased 9.2 per cent to $992 million from the year earlier, due to gains in both the value and volume of products such as butter and cheese. The export value of milk powder fell 7.8 per cent while the volume edged up 1 per cent.

Meat exports, the second-largest commodity export group, slid 8.6 per cent to $62 million. The value of beef exports declined 15 per cent while the volume fell 7.8 per cent, and the value of lamb exports sank 6.3 per cent while the quantity increased 4.6 per cent.

Exports to China, the country's largest market, increased 1.6 per cent. Increases in exports of milk powder, butter and cheese offset declines in raw hides, skins, leather, and logs.

"We may see some deterioration in the trade balance in the near term," Michael Gordon, senior economist at Westpac Banking Corp in New Zealand, said in a note. "Oil import prices have seen a sizeable rebound in recent weeks, while dairy export prices have remained depressed."

February imports into New Zealand increased 2.8 per cent to $3.91 billion from the year earlier month, in line with the $3.94 billion forecast by economists. Consumption goods rose 12 per cent, led by a rise in non-durable goods such as pharmaceuticals, pet food and cigarettes. Semi-durable goods such as toys, games and clothing gained 10 per cent while durable goods such as electrical machinery and jewellery rose 15 per cent.

Imports of intermediate goods edged up 0.6 per cent as an increase in semi-manufactured gold and paper offset a decline in raw cane sugar and crude oil. Capital goods slid 3.9 perc ent as a decline in transport equipment offset a gain in other equipment such as cellphones.

On an annual basis, New Zealand had a merchandise trade deficit of $3.32 billion, compared with expectations for a $3.57 billion deficit in the Reuters poll, and a $2.13 billion deficit at the same time last year.