Trade deficit grows in June 2008 quarter

The seasonally adjusted trade deficit increased to $1.9 billion in the June 2008 quarter, from $861 million in the March quarter, Statistics New Zealand said today.

As a percentage of exports this puts the deficit in the June quarter back to a similar level to that seen in the first half of 2007. Major factors contributing to this increased deficit include a significant increase in imports of one-off capital goods (particularly oil-related) and petroleum and products, combined with a large seasonally adjusted drop in dairy exports.

The seasonally adjusted value of merchandise imports rose 8.5 percent in the June 2008 quarter (to $12.1 billion) following a flat March quarter. One-off capital imports (an oil platform, oil production vessel, and two large aircraft) were the largest contributors to this increase, added to by the highest ever quarterly value of petroleum and products imports.

The seasonally adjusted value of merchandise exports was down 0.5 percent in the June 2008 quarter (to $10.3 billion) following a 2.4 percent decrease in the March quarter. Although lower, June 2008 still has the third highest quarterly exports value on record. The latest small decrease in total exports comes despite increases in most commodity groups and is primarily the result of a large drop in dairy product exports, following on from the recent drought. Crude oil showed the most significant increase, up 56.6 percent (largely due to price rises).

In the month of June 2008, merchandise imports were valued at $3.8 billion, the highest value for a June month, up 16.9 percent from June 2007. This increase was led by crude oil with the price of crude up substantially since June 2007.

Merchandise exports were valued at $3.6 billion in June 2008, up 30.9 percent from June 2007. This is the largest percentage increase from the same month of the previous year since January 2001. The increase in exports was dominated by crude oil and milk powder, butter and cheese.