New Zealand export values drop in another sign of weak economy
Bank of New Zealand predicts GDP shrank 0.2 per cent in the second quarter
[WELLINGTON] New Zealand posted its first quarterly decline in exports in almost two years, adding to signs that the momentum apparent in the economy at the start of the year has faded.
The value of exports fell 3.7 per cent in the second quarter after a 10.6 per cent surge in the three months to March, Statistics New Zealand said on Tuesday (Jul 22) in Wellington. It’s the first drop since the third quarter of 2023.
Exports were the rock star in the first quarter when gross domestic product expanded 0.8 per cent even as consumer and business confidence was wavering. Since then, uncertainty over the impact of US tariff policies on global trade and growth has prompted firms to stall investment and hiring, which has spilt over into weak domestic demand.
The quarterly exports data reflects values rather than volumes, which have a closer correlation to GDP, but the decline adds to evidence in the manufacturing and services industries that indicates the middle of 2025 may be soft for the economy.
Manufacturing contracted for a second straight month in June while service industries have failed to expand for five straight months, according to indexes produced by Bank of New Zealand (BNZ). BNZ predicts GDP shrank 0.2 per cent in the second quarter.
While the Reserve Bank paused its monetary easing cycle this month, policymakers indicated they expected to lower the Official Cash Rate further. Most economists see at least one more cut to 3 per cent in August while some argue for deeper reductions later this year and into 2026 to help speed the economic recovery.
Today’s report showed volumes for some exports including dairy, meat and logs fell after the pick-up in the first quarter. The complete picture on net export volumes is not released until early September, while second-quarter GDP data is due Sep 18.
Still, exports rose 13 per cent from the year-earlier quarter to a record NZ$21.8 billion (S$16.6 billion), buoyed by an overall gain in commodity prices. Annual exports climbed 11 per cent to NZ$76.4 billion. BLOOMBERG
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