New Zealand posted a trade surplus of NZ$2 million in December, the first monthly surplus since May, after imports fell 18.6% in the month from a year ago and exports fell 11.3% from a year ago, Stats NZ data shows.

Exports for the December quarter fell 2.8% to NZ$9.2 billion from the September quarter, the fourth consecutive quarterly fall. Imports fell 3.2% in the quarter to NZ$9.4 billion, the fifth consecutive quarterly decline. This left a quarterly trade deficit of NZ$170 million or 1.8% of exports, which was the lowest deficit since the March quarter of 2009.

Dairy exports fell 10.1% by value in the quarter and 6.1% by volume, while imports of capital goods for investment by businesses fell 11.1% in the quarter as businesses bought less machinery and equipment.

Consumption imports fell 3.6% in the quarter, mostly in semi-durable and non-durable goods such as clothes, shoes, food and beverages. Passenger car imports rose 26.8%.

The figures show New Zealand is turning around its chronic trade deficits by investing less in business equipment and reducing its consumption goods imports by a lesser amount. Contrary to hopes that a turnaround in New Zealands trading performance would see a shift in the economy towards exports and away from consumption, the turnaround has instead come towards a starvation of business investment and only a moderation in consumption growth.