NZ trade surplus first in 21 months

New Zealand posted a surprise trade surplus in March, breaking a streak of 21 months of deficits, Statistics New Zealand said today.

Instead of the $267 million deficit economists had predicted, there was a surplus of $59m. The New Zealand dollar fell 4.4 per cent during March but economists believe it is too soon for the fall to significantly affect trade.

March is traditionally a strong month for exports although in 2005 there was a $190m deficit.

The annual deficit still ballooned to $7.072 billion - a record for a March year. However, it was slightly less than last month's record of $7.321 billion. In the March 2005 year, the deficit was $4.36 billion.

This month's surplus was equivalent to 1.9 per cent of exports whereas the average March month surplus over the last decade has been 3.5 per cent of exports.

Exports during the month were 13.8 per cent higher than in March 2005 with dairy exports the main contributor.

Imports were up 4.6 per cent on a year ago, mainly due to the higher cost of oil and petrol products. However, there was a falloff in car imports, particularly cars exceeding 3000cc, SNZ said.

On a seasonally adjusted basis, exports increased 2.6 per cent in the March quarter following a 4.6 per cent increase in the December quarter. The main contributors were milk powder, butter, and cheese; aluminium products; mechanical machinery and equipment; and wool.

Dairy products were up 3.7 per cent on top of a 10 per cent increase in the December quarter.

Aluminium was up 12.4 per cent on top of the 9.4 per cent increase in the December quarter. Although aluminium volumes fell 2.2 per cent, possibly reflecting the shutdown of some pots at the Tiwai Point aluminium smelter in Bluff due to high power prices, values increased 23 per cent to a five-year high.

Meat and edible offal exports were down 14.9 per cent on the December quarter and meat exports were their lowest in five years.

Seasonally adjusted imports rose 4 per cent on the December quarter with crude oil imports up 27 per cent ($171m).

Capital goods imports fell with transport equipment (that includes cars) down 18 per cent. Car imports fell 11 per cent. However, the biggest contributor to the transport sector's fall was aircraft. Machinery and plant increased 5 per cent.

Of New Zealand's top five trading partners, only exports to Australia increased during the March year. Exports to the United States, Britain and Japan all fell by 5 per cent or more.

- NZPA