NZ: Goods terms of trade falls 0.3% q/q in Q3 – ANZ

New Zealand’s OTI goods terms of trade fell 0.3% q/q in Q3, with growth in import prices outpacing that of exports, notes the research team at ANZ.

Key Quotes

“Overall, the terms of trade remain elevated and are expected to continue supporting national purchasing power.”

“Turning to the detail, NZD export prices increased 2.3% q/q, boosted by dairy (up 6.5%). After adjusting for NZD moves, we estimate implied “world” prices were up around 0.4% q/q. However, with our ANZ Commodity Price Index having softened in recent months and dairy prices trending lower on the GDT platform since May, we’re expecting a bit of weakness to come on that front.”

“NZD import prices rose 2.6% q/q. Petroleum and related product prices increased 6.4%, reflecting higher oil prices. Overall, prices were boosted by the 2.0% q/q depreciation in the NZD-TWI. However, electrical machinery and apparatus goods prices declined in the quarter, likely reflecting quality adjustments. In “world” terms, total import prices were up 0.6% q/q. With both the NZD and oil prices having changed direction in Q4, import prices are likely to too.”