Relatively high commodity prices continue to underpin an export-led recovery and healthy run of trade surpluses during most of the past two years, but monthly figures suggest exports are starting to slow with an easing in global commodity prices, ASB economist Jane Turner said yesterday.
In data released by Statistics New Zealand yesterday, the value of exported goods for the quarter fell 3% to $11.8 billion following falls in the value of meat, dairy products and logs; the latter having come to the end of a China-led buying spree.
"While we expect commodity prices to remain reasonably elevated, we are mindful of the large down-side risks presented by the ongoing euro zone sovereign debt crisis," Ms Turner said.
Imports for the quarter fell 3.2% to $11.4 billion, including parts and accessories for transport equipment, processed fuels and lubricants, processed industrial supplies and crude oil.
"The monthly data suggest the underlying strength in the trade balance may be starting to weaken. Exports are starting to ease, reflecting lower commodity prices. Meanwhile, underlying demand for imports continues to recover as domestic demand in New Zealand picks up," Ms Turner said.
During recent months, global growth concerns saw commodity prices decline, although soft commodity prices have held up relatively well compared with the declines recorded in hard commodity prices, she said.
"The lagged impact of recent falls in New Zealand dollar dairy prices has yet to fully show through in the export figures," she said.
Exports of mechanical machinery, a key component of manufacturing exports, grew strongly for the second consecutive quarter during the third quarter, which was encouraging.
However, looking ahead, weaker trading partner demand may start to weigh on growth in this area, Ms Turner said.
India, in September, had the largest percentage increase for exports, up 73% at $37 million, across a range of commodities, and Denmark the largest decrease of imports, at 81%, down $60 million, driven by a fall in demand for pneumatic power engines.
China took more exports for September, up 13% or $43 million, led by an extra $20 million in wood-related products, but conversely imports from China were also up 13%, or $81 million, underpinned by railway carriages, machinery and fertiliser.
