NZ trade balance unexpectedly turns to surplus in January on slower import growth

New Zealand's trade balance unexpectedly turned to a surplus in January as the impact of weaker crude oil prices on imports outpaced a decline in exports led by dairy products.

The trade surplus was $56 million in January, compared to a deficit of $195 million in December and a surplus of $285 million in January 2014, according to Statistics New Zealand. Exports fell to $3.7 billion in January from $4.42 billion in December and were down from $4.1 billion in January last year. Imports fell to $3.64 billion from $4.58 billion in December and were down from $3.78 billion a year earlier.

Economists had expected a trade deficit for January of $183 million, according to a Reuters survey . The annual balance was a deficit of $1.4 billion, compared to expectations of a $1.6 billion deficit.

ASB economist Jane Turner said weakness in imports extended beyond the impact of lower crude oil prices, even though the $388 million of petroleum imports was the lowest since 2010. Plant and machinery import values were the lowest since last February.

"Given the general strength in the economy and demand, we are inclined to shrug off this result and look to a rebound in import values (ex-petroleum) next month," Turner said. The decline in the value of exports, including a 4.5 percent drop for dairy exports, was in line with ASB's forecast, she said.

Dairy product exports fell 30 percent to $1.18 billion in January from the same month last year and were down 0.1 percent in the 12 month period to $14 billion. Meat exports rose 20 percent in the month to $596 million and gained 13 percent in the year to $6.03 billion. Logs fell 24 percent in the month to $199 million and were down 8.2 percent to $3.6 billion in the year.

Total exports rose 1.9 percent to $49.7 billion in the 12 months through January.

Imports of petroleum and products fell 38 percent to $388 million in January from the same month of 2014 and fell 8.9 percent to $7.45 billion in the 12 month period. Imports of vehicles and parts rose 2 percent to $470 million in the month and rose 14 percent to $6.77 billion in the year. Mechanical machinery imports fell 6.7 percent to $496 million in the month and rose 4.2 percent to $6.35 billion in the year, while electrical machinery gained 2.2 percent to $274 million in the month and rose 0.9 percent to $$3.84 billion in the year.

Total imports rose 5.4 percent to $51.1 billion in the year.