Trade deficit for October far worse than forecast

By NZPA

Thursday 28th November 2002

New Zealand posted a far worse than expected trade deficit of $687 million for October, almost $300 million more than forecast.

Imports for the month totalled $3.18 billion, above the earlier estimate of $2.49 billion, Statistics New Zealand said today.

Economists polled by Reuters had expected on average a $393 million deficit for the month.

The preliminary trade deficit for the year to October was $893 million, Statistics NZ said.

"Monthly trend values indicate rising imports and declining exports, resulting in a widening deficit."

Imported vehicles and aircraft were the main contributors.

The value of imports of vehicles, parts and accessories for October was $452 million, 17.1 percent ($66 million) higher than in the same month a year ago.

Six large aircraft with a total value of more than $200 million were imported last month, compared with the $275 million total of imported aircraft and parts.

The estimated deficit was 27.6 percent of exports, the highest for an October month since 1989 when the deficit was 36.2 percent of exports, the government agency said.

Deficits have occurred in the last 10 Octobers, although the deficit was more than 20 percent of exports on only four occasions.

For the year ended October, the provisional value of merchandise imports was $32.3 billion, up 1.0 percent on the previous October year. Excluding items individually valued at $100 million or more, the value of imports was 1.4 percent higher.

Detailed exports statistics will be released on December 9.

Statistics NZ also released the Producers Price Index (PPI) today, which showed that a fall in prices paid for and received by producers in the three months to September.

The PPI outputs index, which measures changes in prices received by producers, fell 0.6 percent in the September quarter.

The most significant contributions to the fall in output prices came from the dairy cattle farming index (down 23.7 percent) and the dairy product manufacturing index (down 9.7 percent).

The falls reflected lower payouts to dairy farmers and lower export prices for dairy products.

The PPI inputs index, which measures changes in the prices of inputs into production, fell 1.2 percent in the September quarter, the largest quarterly fall since the PPI started 25 years ago.

The most significant contributions to the fall came from the dairy product manufacturing index (down 24.0 percent), and the meat and meat product manufacturing index (down 2.5 percent).

On an annual basis, the PPI outputs index rose 0.3 percent from the September 2001 quarter to the September 2002 quarter, while the inputs index fell 1.7 percent, Statistics NZ said.

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