December's $486 million monthly trade surplus was vastly
different from market expectations of a $105 million deficit
and imports in December were, surprisingly, 10.1% lower than
the same month a year ago.
BNZ head of research Stephen Toplis said no-one expected the
biggest December trade surplus as a share of exports since
1991, but that was what Statistics New Zealand figures showed
The annual trade deficit narrowed to $1.21 billion from $1.39
billion in the 12 months to November.
''We don't think it will be enough to stop the deterioration
in the current account, but at least it will lessen the
BNZ was still forecasting the current account deficit to go
above 5% of gross domestic product (GDP) in the December
quarter from the 4.7% recorded in September.
The lower imports were ''strictly positive'' from a growth
accounting point of view. But that need not be the case in
the bigger picture, if the lower imports were reflecting
something of a slow-down in domestic demand, Mr Toplis said.
''Not that one month's data would convince us either way, but
looking through the details, we do not think that the import
slump indicates a downturnin domestic demand.''
Some of the fall in imports reflected large one-off imports
from a year ago, like helicopters. December exports were
stronger than market expectations, falling by 5.1% rather
than the 7.1% fall anticipated, Mr Toplis said.
''Again, we wouldn't read too much into one month but it does
add a bit more support to income in the fourth quarter
relative to previous expectations,'' he said.
ASB economist Jane Turner said the fall in exports during the
December quarter was led by a fall in dairy exports.
That was due to falls recorded in August through to October
as exports corrected to more normal levels, following a
strong end to the previous season.
Exports had since picked up in November and December on a
promising start to the season and pointed to a recovery in
exports in the March 2013 quarter.
However, if the dry conditions in the North Island continued
to persist, poor grass-growing conditions and high feed costs
could limit this season's production performance, she said.
Manufacturing exports also weakened in the fourth quarter,
probably reflecting slower demand from Australia and the
''We do expect to see some recovery in demand from these
regions over 2013.''
The Reserve Bank of Australia rate cuts should stimulate
demand thereand reduced fiscal uncertainty in the United
States should see its orders for capital goods recover, Ms
Green Party co-leader Russel Norman said the falling
manufactured exports provided further evidence of a growing
crisis in manufacturing.
Dr Norman said Economic Development Minister Steven Joyce
denied there was a problem but the evidence showed the
manufacturing sector was in trouble.
''On Planet Joyce, there's no crisis in manufacturing,
despite the ongoing decline in manufactured exports and the
loss of 40,000 jobs in the sector since 2008,'' Dr Norman
Mr Joyce dismissed claims the country faced a manufacturing
crisis, saying some companies were prospering with a high
Yesterday, he attempted to water down fears raised by
business leaders at the Opposition's parliamentary inquiry
Opposition MPs were told more leading export companies were
on the verge of moving overseas, due to the high dollar, and
they challenged the Government to do more to control the
''The reality is, for some companies, it is a challenging
time,'' Mr Joyce told Radio New Zealand.
''Other companies are doing very well and I could make you a
large list, a long list of New Zealand exporters that are
doing very well in the current environment. But that's the
nature of it.''
Mr Joyce said businesses exposed to different parts of the
exchange rate faced different challenges if the dollar was
high or low.
It would be ''putting false hope into peoples' minds'' to
suggest the Government could have ''a massive influence on
the US dollar''.
He expected a ''better year'' for the United States this
Balance: $486m surplus (forecast $105m deficit)
Exports: $4.07b (forecast $3.98b)
Imports: $3.58b (forecast $4.13b)
Annual balance: -$1.21b (previous -$1.39b)