ASB economist Jane Turner said global prices for dairy and meat had been correcting from elevated levels. But the stubbornly high New Zealand dollar in the early months of this year had eroded export returns.
"The decline over recent weeks should bring some respite. Nonetheless, export returns for dairy and meat are likely to remain more subdued over 2012 compared to 2011."
The weaker export performance would reduce some of the support to the New Zealand economic recovery for 2012 and Ms Turner expected the Reserve Bank would continue to provide support to the New Zealand economy by leaving the official cash rate on hold at 2.5% until March next year.
An analysis of the Statistics New Zealand trade balance release showed the April monthly trade balance of $355 million was close to expectations. April was a seasonally strong month for exports and, after seasonal adjustments, the trade balance was in deficit of $200 million.
Seasonally adjusted exports had fallen in recent months, reflecting weaker dairy and meat exports.
As a result, the annual trade balance fell into a deficit of $541 million for the first time since March 2010.
Ms Turner said seasonally adjusted dairy exports peaked back in December and had fallen steadily since them - the result of both lower volumes and lower prices.
Prices had fallen globally, although from very high levels.
The relatively high level of the dollar had further eroded NZ dollar returns.
"We expect to see dairy exports continue to ease over the coming months but should start to stabilise later in the year. Given the downgrade to Fonterra's milk price forecast, volume growth over the next season is likely to be more subdued."
Meat exports also continued to fall on a seasonally adjusted basis, having peaked in September last year, she said.
Lower prices had been the key factor behind the falls. Like dairy prices, the high level of the dollar was a contributing factor in the fall.
Forestry exports lifted in April, although that followed unusually low exports in March.
Forestry volumes had grown over the past few months, although implied prices were weak and the high level of the dollar was again likely to be a contributing factor to the decline, Ms Turner said.
Manufactured exports remained robust and appeared to have recovered from a slow patch late last year.
Manufacturing confidence had been reasonably strong in the early months of this year but had deteriorated more recently.
Slowing momentum in Australian and Asian growth in the early parts of the year was likely to be affecting demand of manufactured exports.
The low level of the New Zealand dollar-Australian dollar cross should continue to support competitiveness in the Australian market, New Zealand's largest export market.
Imports were slightly weaker than expected, although that appeared to be due to lower oil imports, Ms Turner said.
"Oil imports have been particularly lumpy over the past few months and likely affected by the timing of shipments."
Imports of consumer items had been relatively flat in recent months, but with the falling value of the dollar, Ms Turner expected to see continued gradual growth in consumer import volumes and retail spending in the coming year.
