NZ July trade balance surprises to the upside – Westpac

New Zealand's trade balance surprised to the upside with a surplus of $85 million for the month of July, notes Shyamal Maharaj, Economist at Westpac.

Key Quotes

“New Zealand’s merchandise trade surprised to the upside in July with $85m surplus, above our forecast of a $200m deficit. This is the first surplus we have seen in July since 2012. This saw the annual deficit dropping back to $3.2b, underpinned by a 17% rise in exports. The rise in exports over the past year came on the back of a 51% surge in dairy exports (up $426m), the largest rise in any month since March 2014.”

“In seasonally adjusted terms, exports rose by 6.7%, following a moderate rise in June 2017. Dairy and meat exports continued to post gains over the month and show firmness in the general demand environment, especially with the rise of exports to China.”

“Imports rose by 2% in July, following a 3.7% decline in June on a seasonally adjusted basis. Vehicle imports continue to be a key driver.”