March 2012 trade figures indicate a fall in the value of exports compared to year-earlier levels. Exports were valued at $4.2bn in March, down from $4.6bn in March 2011. Flagship exports such as dairy, crude oil and fruits all recorded lower export revenue this March.
Exports of milk powder, butter, and cheese were down to $1.1bn, a drop of 14.5% compared to the same month last year. The decline in receipts is due to a drop in demand overseas, with dairy export volumes falling by 2.8% from a year ago. Other major exports that posted a double-digit drops in revenue were fruit (down 23.3%), logs and wood (down 21.2%), meat (down 14.0%), and iron and steel (down 22.8%). March 2012 trade figures also reported weaker receipts from wine exports, with receipts shrinking to $91m from $105m a year earlier.
While the monthly comparison contains many worrisome signs as the period ahead, the annualised export receipts show a respectable performance over the past year. The chart illustrates strong revenue growth across most categories, with wool leading the charge. However, the effects of the Christchurch earthquake can be seen in the returns from the struggling tourism and export education sectors. Further, the recent slides in meat, forestry and dairy earnings do not bode well.
Unlike exports, the imports story remains stable. Import values totalled $4.0bn in March. Movements were due to higher imports of capital (plant and transport equipment), crude oil, and other intermediate goods. A 55% increase in petroleum imports in the year to March was also a large contributor. In annual terms, the value of capital imports increased by 6.8% while imports of intermediate goods rose 13.2%. Spending by households’ remains weak, as suggested by imports of consumer items rising only 1.2% (by value) over the year to March.
Overall, the merchandise trade surplus for the March month fell to $134.5m, from $583m in the same month year ago. This lower trade surplus confirms our expectation of lacklustre growth over the first quarter of 2012. However, on a positive note, increased imports of capital and intermediate goods suggest tentative optimism going forward.