Global Economic and Trade Update for New Zealand Businesses - 17 September 2021

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We welcome feedback from New Zealand exporters on this report and invite requests for reporting from New Zealand’s network of Embassies and High Commissions(external link). If you would like to be added to the weekly distribution list for this report, please also email us at exports@mfat.net.

Domestic Updates

  • New Zealand's total two-way trade in the first half of 2021 fell 3% on the same period last year, as a decline in total exports was only partially offset by a rebound in total imports. This weak overall performance was dragged down by tourism-related services; outside of tourism and export education, however, trade generally experienced a broad-based recovery. China’s role as our largest goods trading partner has grown as its economy led the global post-COVID recovery in the first half of 2021. The share of New Zealand’s goods exports heading to China rose to 31% in the year to June 2021 – the highest on record.
  • New Zealand's goods exports grew 1% in the first half of 2021 compared to the same period last year, and were 3% higher than 2019's pre-COVID levels. Exports of dairy, meat, and logs performed well on the back of strong global demand and high prices, although poor weather and labour supply constraints affected exports of wine and some fruit. New Zealand’s goods imports rebounded strongly, supported by the domestic economic recovery and higher NZD. They were up 14% on the same period last year and 2% higher than 2019. Household demand for consumption goods led to strong growth in imports of furniture and toys and games, while improving business confidence led to a recovery in imports of capital goods like electrical machinery.
  • Services trade remains severely constrained by border restrictions. Services exports were down 43% in the first half of 2021 compared to the same period last year, and 53% lower than 2019 levels. Trade in travel (including tourism) and transportation services is only a fraction of what it was pre-COVID, but ICT services and services related to screen productions provided a couple of bright spots.
  • The Government announced that Auckland will continue to stay at COVID-19 Alert Level 4 while the rest of New Zealand will remain at Alert Level 2 for at least a further week. These settings will be reviewed on Monday the 20th of September. For further information, please continue to refer to the New Zealand government COVID-19 website https://covid19.govt.nz/(external link), including information about doing business at different Alert Level settings(external link) and financial support for businesses(external link).
  • On Wednesday 15 September,  Minister for COVID-19 Response Hon Chris Hipkins announced that the pause on MIQ room releases is to be lifted on Monday 20 September, including the release of approximately 3000 MIQ vouchers spread across the period from release until and including December. This release will launch and pilot the new ‘Virtual Lobby’ mechanism. Further information can be found in the MIQ website here(external link).
  • On 10 September, the Government announced(external link) that one-way quarantine-free travel for Recognised Seasonal Employer (RSE) workers from Samoa, Tonga and Vanuatu will start in October. This is the first stage of one-way quarantine-free travel with these three countries, initially for RSE workers. Officials in New Zealand are working with partner Pacific countries and the industry on the final measures that need to be in place, with exact flight dates in October to be confirmed.

Regional Updates

Australia and the Pacific

  • The Australian state of Victoria has joined New South Wales in conceding it will not eliminate COVID-19, as daily cases in the state climbed to more than 200 early this week. Victorian Premier Daniel Andrews said the purpose of the state’s lockdown was now to “buy us time” for vaccination rates to increase. Western Australia and Queensland continue to pursue elimination and are now signaling they may not adhere to a previously agreed national plan to ease restrictions once key vaccination targets are reached. Australian health officials also announced this week that quarantine-free flights from New Zealand would continue to be paused until at least 14 September due to the outbreak here.
  • It is now a requirement of entry for all travelers to American Sāmoa to be fully vaccinated against COVID-19.   This follows the decision by the US Food and Drug Administration (FDA) to issue a full biological license for the Pfizer vaccine for 16 years and older. The American Sāmoa Government’s (ASG) Declaration of Ongoing Public Health Emergency and State of Emergency issued on August 13, 2021, made vaccination a condition of entry as soon as the FDA fully approved a vaccine. With a view to possibly easing of border controls later in 2021, the government has introduced a Safe Travel American Sāmoa (STAS) flight system which no longer required pre-departure quarantine in Hawaii, but does include pre-departure COVID-19 testing requirements and on-arrival MIQ and testing before release.

Asia

  • Viet Nam’s seven-day COVID-19 case average is currently 12,706 cases daily, with Ho Chi Minh City and surrounding provinces worst affected. The economic impact of the lockdown is being felt, with restrictions on transport movement, domestic travel, and strict operating conditions severely constraining supply chains and business operations. The Government of Viet Nam continues to pursue its two-pronged approach to addressing the pandemic impacts: maintaining the public’s health and reducing the economic impacts. The World Bank has cut its GDP growth projection for 2021 by 2 percentage points to around 4.8%.

Market reports released this week

  • The previous global economic and trade update can be found here.

External links

The following links may provide useful information to businesses:

  • NZTE(external link) has a website focused on providing COVID-19 information for exporters. They’ve also launched myNZTE(external link), an interactive digital portal of insights and tools available to all New Zealand exporters.
  • The Treasury releases a weekly economic update(external link) every Friday. Stats NZ has published a data portal(external link) with near real-time economic indicators.
  • MBIE publishes a sector reports series(external link) which provides regularly updated reports on all industry sectors that make up the New Zealand economy. These include official economic data and the challenges and opportunities that face New Zealand’s industry sectors.
  • govt.nz(external link) provides tools and advice from across government to save small businesses’ time and help make the business a success.
  • MFAT has created a tariff finder(external link) which is designed to help goods exporters and importers maximise benefits from New Zealand’s Free Trade Agreements and compare tariffs in 136 other markets.

To contact our Export Helpdesk

Disclaimer

This information released in this report aligns with the provisions of the Official Information Act 1982. The opinions and analysis expressed in this report are the author’s own and do not necessarily reflect the views or official policy position of the New Zealand Government. The Ministry of Foreign Affairs and Trade and the New Zealand Government take no responsibility for the accuracy of this report.

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