AUS
NZ
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CA
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Summary
- New Zealand ran its first trade surplus in 10 years totalling $3.0 billion.
- Far less fuel, motor vehicles and heavy machinery were imported into New Zealand in 2020 as demand for such goods stalled during the lockdown and beyond.
- Exports of agriculture, medical equipment, aircraft parts, and infant formula products helped offset the drop in Education and Tourism exports.
- Trade surpluses were achieved with Japan and the US, two key trading partners with whom NZ typically run deficits.
The value of imports that made into New Zealand in 2020 was $7.4 billion lower than in 2019. Total imports fell from $64.4 billion to $57.0 billion as supply chains were disrupted by COVID-19 and demand in NZ for exports dropped as well.
Goods that were imported significantly less last year included fuel and motor vehicles. Households significantly reduced their travelling during the lockdowns and, where appropriate, began working from home.
Remote working persisted throughout 2020, long after the lockdowns ended, further adding to the drop in demand for fuel and car imports last year. Petroleum products represent $2.4 billion in the total drop in imports, while motor vehicles represent $2.1 billion.
Machinery and heavy equipment also heavily contributed to the decline in imports as business delayed purchases until uncertainty regarding the resilience of the economy receded.
Exports Rise
The value of exports that made their way out of New Zealand and to our trading partners lifted slightly by $24 million. Total export value equalled $60.0 billion in 2020. The trade balance surplus of $3.0 billion is the first surplus New Zealand has run since 2011 and the largest in the past 28 years.
The slight lift in exports does not signal that NZ exports were wholly unaffected. Rather, some industries were negatively affected, such as education and tourism, while other industries were positively affected and increased their export volumes.
The value of agriculture, medical equipment, aircraft parts and infant formula exports all lifted by hundreds of millions of dollars in 2020 to help lift total exports and offset the drop by those negatively affected.
New Zealand’s trading partners
It is primarily thanks to the lack of imports from the United States and Japan that New Zealand was able to achieve a surplus in 2020. The trade deficit New Zealand ran with the US in 2019 was $795 million while the deficit with Japan was a similar $732 million. Remarkably, in 2020, New Zealand’s trade balance with the US and Japan completely switched to become surpluses of $1.1 billion and $331 million, respectively.
Trade balances with Australia and China, New Zealand’s two largest trading partners, largely remained the same throughout the year.
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