July was positive month for New Zealand trade, with a slight trade surplus of $15 million. Yet, our trade deficit increased from $756 million in June to $825 million this month based on annualised values.
It is rather disappointing that imports had an average annual growth rate of 6.4 percent against only 1.6 percent per annum growth rate in exports. Exports will need to grow faster as the national economy is in need of a boost to pull off a more convincing increase in GDP growth (official March 2012 GDP growth was 2.4 percent).
The export sector is still struggling to gain strength as key markets suffer in the wake of the European and wider global financial crisis. Receipts from our main exports, dairy, meat and forestry were far from stable. In the 12 months through to July, receipts from forest and meat exports fell 8.1 percent and 4.9 percent, respectively. The return to trade surplus in the past five months was supported by a strong flow of receipts from dairy products. The value of dairy exports was up 4.3 percent in the year to July 2012 and continues to underpin a modest trade performance.