New Zealand's terms of trade eased in the three months ending September but remained at very high levels, ASB economist Jane Turner said yesterday.
The terms of trade, which represent New Zealand's purchasing power with the rest of the world, eased against expectations of a flat outcome.
They still remained elevated by historical standards and highlighted the export-led nature of New Zealand's economic recovery, she said.
"The current crisis in the euro zone, and the potential for slower global growth over the coming year, do threaten the sustainability of the export-led recovery."
To date, some of New Zealand's export prices and volumes had held up well, particularly dairy.
However, other areas were starting to show signs of weakness, in particular forestry, Ms Turner said.
There remained large downside risks around the global outlook, in turn posing downside risks to the country's export outlook, she said.
Statistics New Zealand figures showed that in the September quarter both export and import prices fell,although those falls were largely due to the lift in the New Zealand dollar in the same period.
The New Zealand dollar rose 4% against the US currency in the quarter.
Ms Turner said that suggested that New Zealand export prices remained largely unchanged once currency movements were taken into account.
New Zealand export prices, particularly for dairy and meat, held up well through to the end of September.
"We expect to see more moderation in dairy pricesin the fourth quarter, reflecting declines already seen in spot markets, and allowing for the lags in negotiation of contracts and delivery."
Key statistics
Terms of trade .... -0.7%
Export prices .... -4%
Import prices .... -3.4%
Export volumes .... -0.8%
Import volumes .... -2.7%
(quarter on quarter)
