International Trade Statistics
International Trade Statistics
OTI, Volume, Prices, and Terms of Trade, Goods and Services, Overseas trade, International trade
Statistics New Zealand
Statistics New Zealand: International and Business Performance Statistics (goods trade, services trade, volumes) and Prices (prices)
Statistics New Zealand
Goods and Services Trade by Country statistics bring together imports and exports of both goods and services by country to present a comprehensive view of economic trade between New Zealand and our main trading partners.
The Overseas Merchandise Trade Prices and Volumes Indexes measure changes in the levels of prices and volumes of imports and exports of merchandise trade to and from New Zealand.
The Overseas Services Trade Price Indexes measure changes in the levels of prices of imports and exports of services trade to and from New Zealand.
The purpose of the International Trade Statistics release is to provide a quarterly snapshot of New Zealand's trade with the rest of the world. The overarching release will combine the Overseas Trade Index and Goods and Services Trade by Country releases into a single release.
The Goods and Services Trade by Country release brings together imports and exports of goods and services, broken down by country, on a quarterly basis. It presents a comprehensive view of economic trade between New Zealand and our main trading partners. Potential uses of the data include trade negotiations (MFAT), weighting for the Trade-Weighted Index (TWI) by RBNZ and forecasting for the Balance of Payments and Gross Domestic Product releases by commercial banks, Treasury and RBNZ.
Overseas Trade Indexes provides statistical information on how import and export prices and volume levels have changed between time periods, i.e. quarterly and annually.
The Overseas Services Trade Price Indexes measure changes in the levels of prices of imports and exports of services trade between New Zealand and the rest of the world.
Goods and Services Trade methodologies
##Goods trade data methodology## Goods trade data is presented as per Balance of Payments (BoP) methodology rather than merchandise trade methodology. BoP and national accounts report imports and exports in the period economic ownership of the asset changes. This is in contrast to merchandise trade methodology which measures the imports and exports when they cross the customs frontier.
Services data is already collected and presented as per BoP methodology ##Conceptual adjustments## As a result of presenting goods data according to BoP methodology, a number of "conceptual adjustments" are made to the data. These adjustments include:
- - Timing adjustments, such as when ownership of a good changes in one period but the good doesn't cross the customs frontier until another period.
- - Coverage adjustments - imports of goods under $1,000, changes in oil stocks held abroad, and removing operating leases from goods trade data (as it is a service).
- - Classification adjustments - general classification adjustments, such as removing the cost of insurance and freight as these are considered services under BoP methodology.
Overseas Trade Indexes methodologies
What the volume and prices indexes measure
The Overseas trade indexes are numerical series that indicate how a set of prices and volumes have changed between time periods. Each index measures changes in the level of prices or volumes rather than the actual prices or quantities. It is the change between two index numbers that is important. An individual index number has no meaning. The overseas services trade indexes measure changes in price levels of services to and from New Zealand each quarter.
Price and volume measurement involves decomposing transaction values (in current prices) into their price and volume components. In principle, the price components should include changes arising solely from price changes, while all other changes (relating to quantity, quality, and compositional changes) should be included in the volume components. Our aim is to analyse which changes in aggregates are due to price movements, and which to volume changes. This is 'constant price' measurement and implies the analysis of economic transactions valued at certain fixed prices.
The merchandise trade indexes include all commodities classified as merchandise trade, although the export indexes exclude re-exports, bunkering (re-fuelling the vessels), ships' stores, and passengers' effects.
The services indexes are based on the System of National Accounts 2008 (2008 SNA). The system establishes the range of services to be included in the indexes, and key practices we use to classify and process services data (eg the treatment of insurance).
Source of information – merchandise trade data
We derive the value and quantity data we use for calculating the merchandise price and volume indexes from Stats NZ's overseas merchandise trade (OMT) statistics. These statistics are processed from export and import entry documents lodged with the NZCS by exporters, importers, and their agents.
Because OMT statistics are provisional for the three most-recent months, we may amend them in the three months after initial publication.
We classify data using the Harmonised System (HS) 2017 classification — for processing the NZCS entries and publishing our overseas trade statistics. There are over 15,300 10-digit items in the HS classification.
See Harmonised System (HS) 2017 for more details.
We derive HS 10-digit item-by-country unit values from our OMT statistics. We calculate quarterly item-by-country unit values by dividing the total value of an HS item exported or imported during the quarter by the total quantity of the item exported or imported during the quarter.
For basic, homogeneous commodities not subject to ongoing quality change, unit values provide suitable indicators of price change. However, they are not good indicators of price change for heterogeneous goods (eg elaborately transformed goods, technically complex goods, or goods subject to rapid quality change). We selectively supplement unit values with prices collected directly from importers and exporters, and by international price indexes.
Source of information – service trade data
We derive the value data we use to calculate the weights in the service indexes from our balance of payments (BoP) data. Every year, we use new weights to calculate the services indexes from the September quarter onwards. These weights use BoP data for the year ended June.
Pricing information we use to calculate the indexes is collected from our Commodity Price Survey, which collects prices for approximately 10,000 individual items. A postal survey collects prices from about 2,000 respondents and is supplemented by prices gathered from international price indexes, generally each quarter (but sometimes annually). The price on the 15th day of the middle month of the quarter is used to measure domestic prices.
For the import services indexes, many prices come from international price indexes. Their collection depends on the frequency and timeliness of the indexes publication — if monthly, we use the middle month of the quarter; however, we may lag prices by a month or a quarter if the value for the relevant period is not available in time.
Basis of valuation - Merchandise trade
We calculate the merchandise export indexes using New Zealand-dollar (NZD) free on board (fob) values. Export fob values represent the actual or estimated transaction prices of goods, including costs incurred in delivering goods on board ships and aircraft at New Zealand export ports. We convert values given in foreign currencies into NZD, using the weekly exchange rates when the statistics are compiled. This means that any hedging will generally not be reflected in the OTI.
The merchandise import indexes use NZD value for duty (vfd) values which represent the value of goods excluding the cost of freight and insurance. The 2008 SNA recommends vfd for imports and is used in New Zealand's national accounts.
Merchandise import price and volume indexes are not directly affected by changes in the rates of duty payable on imported goods, as cif values do not include duty. We use exchange rates and trade weighted indexes (TWI) from both New Zealand Customs Service (NZCS) and Reserve Bank of New Zealand (RBNZ) to value merchandise trade imports and exports, respectively.
NZCS exchange rates differ from the weekly exchange rates used to calculate merchandise export values. We convert import values from foreign currencies, using the rates the NZCS sets every two weeks. These exchange rates are prepared 11 days before the effective date (when the item was imported) and are then applied for two weeks. Therefore, there is a lag of 11 to 25 days between the NZCS exchange rates and those the Reserve Bank publishes. This means the NZCS exchange rate, and therefore the import prices, will be slower to show the effect of exchange-rate changes than the Reserve Bank rates and the export prices.
A table detailing the exchange rates used for merchandise trade can be found in table 6 of the OTI (prices) published tables.
Basis of valuation - Services trade
The services price indexes use NZD values for both exports and imports. Exchange rates we use to calculate the services indexes differ from those used for the merchandise indexes. Prices collected in foreign currencies are converted using the exchange rate supplied by Westpac Bank for the 15th day of the middle month of the quarter. The foreign currencies used in the services indexes include the US dollar, Australian dollar, Fijian dollar, Japanese yen, and the United Kingdom pound.
Index type and calculation - Merchandise trade
The merchandise index series is calculated using a multilateral method known as fixed-effects window-splicing (FEWS). FEWS combines the trade line information (merchandise trade data) such as description and company name to create a unique identifier (ID) for each product.
The FEWS index is calculated on the price change for each item, compared to itself over a given time frame (window). The FEWS method is calculated over nine quarters which accounts for items that have strong seasonal patterns.
The current quarter coefficient will join, or splice, on to the previous index to give a movement for the current quarter. This movement will be, in part, the pure price change, but will also include a ‘catch-up’ factor to maintain the index at the level it would have been if the series had been revised. Calculating on windows and chaining the index rather than just calculating over the whole time series allows for greater characteristicity, ie the current quarter estimate is less influenced by those in the distant past. The FEWS method is not locked into a fixed basket. The introduction of a new product is automatically and instantly considered in the current quarter calculation, avoiding bias from sample attrition and product churn in other calculation methods.
Index type and calculation - Service trade
The services indexes are an annually chain-linked Laspeyres price index series. We determine the weights by the relative importance of services and businesses within the service industry, using information from surveys, censuses, and other sources.
OTI (prices) for services use information from the Balance of Payments Manual, sixth edition (BPM6). These are reweighted in the September quarter of every year.
How we calculate the terms of trade
We calculate the merchandise terms of trade index as the ratio of the total export price index to the total import price index, which we present on an index reference period of the quarter ended June 2002 (=1000).
We calculate the services terms of trade index as the ratio of the total services export price index to the total services import price index, using the June 2014 quarter as the index reference period.
An index value above (or below) 1000 indicates that the terms of trade are more (or less) favourable than in the index reference period.
An increase in the terms of trade index indicates the real purchasing power of exports has increased, while a decrease indicates a drop in the purchasing power of exports.
Timing of published data
Merchandise trade provisional indexes are available within nine weeks of the end of the reference quarter. We release final indexes within 22 weeks of the end of the reference quarter. We publish the provisional (current quarter) merchandise price indexes with final (previous) merchandise price indexes. Previous quarter finalised data will incorporate more-recent information that may affect prices, volumes, values. We expect the difference to be small.
The services price indexes are published in the current quarter as final figures.
There are three types of explicitly priced items:
Reliable unit values based on merchandise trade data prices collected directly from importers or exporters international price indexes used as price indicators. We impute prices for remaining items using price movements of items of a similar type that are more reliable indicators.
The overseas trade indexes are Fisher Ideal indexes. As Fisher Ideal indexes are calculated at the country grouping level (for the European Union (EU) and the 'Rest of World' (ZZ)), and the HS 10-digit item level for all countries, imputation occurs at up to four levels, as the table below shows.
Seasonally adjusted estimates - merchandise trade
We can split time series into trend, seasonal, and irregular components. Seasonal adjustment aims to eliminate the impact of regular seasonal events (eg lambing or harvesting) on time series. This makes the data for adjacent quarters more comparable. Trend estimation removes the seasonal and irregular components. Trend estimates reveal the underlying direction of movement in a series and are used to identify turning points.
We use the X-13-ARIMA-SEATS package to produce the seasonally adjusted and trend estimates referred to in the media release, key facts, commentary, and tables. We revise the most-recent seasonally adjusted and trend figures each quarter. This enables us to better estimate the seasonal component and remove it from the series. The largest revisions occur in the quarter before the current quarter.
How we calculate the unit values of imported cars
Calculating price movements for the main HS 10-digit item codes for cars differs from the calculation we use for other items in the OTI. We calculate used-car codes for the previous June quarter and current quarter prices, for each year of manufacture. The new car codes have prices calculated for each of the main makes of car recorded under the codes. We weight movements in these prices by the value of cars imported, for each year of manufacture (used cars) and make of car (new cars), to give Paasche, Laspeyres, and Fisher indexes at the HS 10-digit item-by-country level. The dollar value of the cars treated in this way made up 8.9 percent of the total dollar value of imports in the year to June 2003.
Directly surveyed prices
We collect prices directly from importers and exporters for selected goods that are imported or exported regularly, in the same form to the same or similar specification items may not have a specified unit of quantity, or may fall under an HS code with a heterogeneous description.
We began collecting these prices in 2002, through the commodity price survey (CPS) we use for the producers price index (PPI).
The process of adding to the pool of directly surveyed prices is an ongoing one and is part of the overseas merchandise trade index quality assurance programme.
International price indexes
We use international price indexes selectively as a proxy to measure price change faced by importers for goods that are irregularly imported (eg public transport equipment), imported to one-off specifications (eg telephonic and telegraphic apparatus), and for technically complex goods subject to rapid quality change (eg computer equipment). The US PPI is mainly used as a proxy, with some use of the US HS export price index. In both cases, monthly international price index numbers are converted to quarterly index numbers and then exchange-rate adjusted using the NZCS rates of exchange.
Consistency of broad economic categories with national accounts' classes
Broad economic categories (BECs) are arranged, as far as practicable, to align with the System of National Accounts’ three basic classes: capital goods, intermediate goods, and consumption goods. We categorise commodities in BECs by their main end use (eg all phones are treated as consumption goods even though some are used in business).
Parties in commercial contracts use a range of our price indexes in their indexation clauses (also known as contract escalation clauses). An indexation clause provides an agreed procedure for adjusting an originally contracted price, to reflect changes in costs or prices during the life of the contract.
Contract Indexation: A Guide for Businesses provides information on the price indexes we produce and issues relating to their use in indexation clauses. The guide also outlines points to consider when preparing an indexation clause, and includes an example of the mechanics of a simple indexation formula.