2017.02.2817:14:00UTC+00New Zealand Q4 Terms Of Trade +5.7%

New Zealand's terms of trade advanced 5.7 percent on quarter in the fourth quarter of 2016, Statistics New Zealand said on Wednesday.

That exceeded expectations for a gain of 4.0 percent following the 1.7 percent decline in the previous three months.

The lift in the terms of trade in the fourth quarter was the largest quarterly increase since the September 2013 quarter, when the terms of trade for goods rose 7.5 percent.

"The uptick of dairy export prices lifted New Zealand's terms of trade," business prices manager Sarah Williams said. "However, dairy export prices are still about a third lower than they were three years ago."

Seasonally adjusted goods export volumes fell 5.8 percent, and goods import volumes rose 1.2 percent.

Seasonally adjusted goods export values fell 0.6 percent (to NZ$11.3 billion), and goods import values rose 0.1 percent (to NZ$12.3 billion).

The services terms of trade rose 2.5 percent, while services export prices rose 2.0 percent, while services import prices fell 0.5 percent.

While dairy export prices (up 14 percent) and values (up 9.8 percent) rose in the December 2016 quarter, dairy export volumes were down 8.1 percent. Despite the fall in volumes, New Zealand has earned more from the sale of dairy products abroad compared with the third quarter.

"Ongoing improvements in technology have meant that imports are better value for money," Williams said.