Business Environment Profiles - New Zealand
Published: 06 September 2024
Value of merchandise trade imports
78 $ billion
3.9 %
This report analyses the value of New Zealand's imported merchandise. The data for this report is sourced from Statistics New Zealand (Tatauranga Aotearoa), and is measured in billions of current New Zealand dollars. The data is measured in financial years.
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IBISWorld forecasts the value of merchandise trade imports to decrease by 1.7% in 2024-25, to $77.62 billion. Merchandise trade imports were down by around 4.0% in the first quarter of 2024-25, with a reduction in the value of vehicles, parts and accessories biggest driver of the decline. Strong import value in July, particularly for petroleum and petroleum products, has made estimates for the remainder of 2024-25 more optimistic. However, a decline in the value of merchandise trade imports is expected across the year, as import prices continue to fall from the high levels seen in 2022-23.
The value of merchandise imports has fluctuated but risen over the past five years. The New Zealand dollar has depreciated over the past five years, causing the costs of most major imported goods to rise. However, this trend has had a mixed effect on international imports. On the one hand, higher prices for imported goods have limited demand from some consumers, particularly for discretionary items. On the other hand, New Zealand's limited manufacturing base means consumers are often largely dependent on imports of manufactured goods. Specifically, refined petroleum, road vehicles and machinery products construct the largest imports into New Zealand. This reliance on foreign manufacturing makes import demand relatively price-elastic. Changes in the value of the New Zealand dollar are often directly passed onto the consumer, which can cause the value of total merchandise imports to increase. Overall, the depreciation of the New Zealand dollar over the past five years has contributed to the rising total value of imports over the period.
Imports declined substantially in 2020-21, due to the impact of COVID-19. Government restrictions on travel saw demand for fuel and motor vehicles decline rapidly. Additionally, falling global demand for fuel as a result of the pandemic caused sharp price declines, exacerbating the fall in value of imports. Furthermore, poor domestic economic conditions as a result of these and other government restrictions, saw consumers hold back on spending on discretionary goods, many of which are imported from overseas. Nevertheless, surging pent-up demand following these declines, combined with strong domestic and international inflationary pressures stemming from supply chain bottlenecks also led to a significant recovery in the value of imports in 2021-22 and 2022-23. Large spikes in oil prices caused the value of refined petroleum imports to skyrocket. New Zealand's reliance on imported fuel meant that these price increases had a limited effect on demand. The value of road vehicle imports also jumped as consumers were able to travel again following the relaxation of pandemic restrictions.
The total value of merchandise trade imports slumped in 2023-24. Petroleum import prices fell significantly after reaching record highs in 2022-23. A spike in demand for petrol imports offset some of the impact of this trend on the value of petroleum product imports. The volume of road vehicle imports also fell significantly. Given petroleum and road vehicles construct around 20.0% of New Zealand's imports, the poor performance of these commodities was a significant driver of the 11.2% decline in total value of merchandise trade imports 2023-24. Weak household economic conditions, including low consumer sentiment and household discretionary incomes constrained consumer spending, which limited demand for imports. Overall, IBISWorld forecasts the value of merchandise trade imports to rise at a compound annual rate of 3.9% over the five years through 2024-25. Major drivers of this five-year trend have been rising prices for petroleum imports and increasing volumes of road vehicle and electrical machinery imports.
IBISWorld forecasts the value of merchandise trade imports to grow by 2.5% in 2025-26, to $79.56 ...
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