Overview
Statistics New Zealand has completed a census of New Zealand's international trade in commercial services and royalties for the June 2005 year. Commercial services includes service types such as ICT (information, communication and technology), business, technical and other miscellaneous services. The 2005 Census recorded exports (sales) of these service types abroad of $2,628 million, while imports (purchases) from abroad were $3,541 million. These international transactions are an important contributor to New Zealand's total international services trade. Exports and imports of commercial services contributed 21.3 and 30.8 percent of total services exports and imports in the balance of payments current account, respectively, in the June 2005 year. (Exports and imports of travel, transportation, insurance and government services make up the rest of total services in the current account.)
The 2005 Census of commercial services and royalties provides a more comprehensive measure of New Zealand's international trade in these services, and more detailed breakdowns of service types than were previously available from the quarterly sample survey-based estimates. In addition, the census updates New Zealand's practice in compiling international trade in services statistics, to align more closely with international best practice. The main impact is the classification of service types to more closely align with the guidelines set out in the Manual on Statistics of International Trade in Services, published in 2002 by six international organisations, including the International Monetary Fund (IMF), Organisation for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO). This topic is further discussed in the technical notes to this release.
A key feature of the 2005 Census is the provision of detailed information about the countries with which New Zealand engages in international services transactions. The main countries that New Zealand engages in international commercial services trade are Australia and the USA, however several other countries such as the UK, Korea, Japan, and the Netherlands also feature. In many cases, direct investment between two economies is accompanied by trade in services, and this is particularly the case for New Zealand as Australia, the USA and the UK are also our main international investment partners.
Changes in composition of services sales and purchases
The value of total exports and imports of commercial services and royalties has grown significantly since the 1992 Census. Exports in the June 2005 year were $2,628 million, compared with $607 million in the June 1992 year and $1,310 million in the June 1999 year. Imports were $3,541 million in the June 2005 year, $1,589 million in the June 1992 year, and $2,554 million in the June 1999 year. The balance on commercial services, as measured by the censuses, has narrowed from a deficit of $1,244 million in the June 1999 year, to a deficit of $913 million in the June 2005 year. This narrowing has been due to stronger growth in exports than imports of these services,with exports (sales) of commercial services 100.6 percent higher than in the June 1999 year, and imports (purchases) 38.6 percent higher in the latest year. The relatively stronger growth in services exports is reflective of sustained growth in the services industries apparent from the national accounts.
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These export and import values are in current prices so no adjustment has been made for price changes that occur over time. This means that the increase in commercial services and royalties exports and imports since the June 1999 year could reflect price increases, volume increases, or a combination of both.
Since the previous censuses, definitions and classifications of services used internationally have evolved, however the broad categories of service types remain consistent. The 2005 Census results in this release uses an Extended Balance of Payments Services classification (EBOPS) which can be compared across time periods for the main service types (classifications and changes in reporting across time periods is further discussed in the technical notes to this release).
The 2005 Census results
Comparing the commercial services and royalties sales and purchases as proportions of total services shows changes in relative significance over time. Exports of commercial services and royalties as a proportion of total international services exports (comprising transport, travel, insurance, government, commercial services and royalties) were 20.8 percent in the June 1992 year, 18.6 percent in the June 1999 year, and 21.3 percent in the June 2005 year. Imports of these services as a proportion of total services imports were 26.3 percent in the June 1992 year, 31.1 percent in the 1999 year, and 30.8 percent in the 2005 year. Comparing the 1999 and 2005 years at the aggregate level shows an increasing significance of exports of commercial services and royalties within the current account estimate of total services, and relative stability for imports. An indication of relative growth or contraction of the various commercial service types in New Zealand's international services trade can be gained from comparing the share of each service type with total exports and imports of commercial services and royalties.
Exports of commercial services and royalties
Comparing the values for main service types in the Censuses of 1992, 1999 and 2005, shows that:
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computer and information services accounted for 11.3 percent of exports of commercial services and royalties in the June 2005 year, compared with 7.4 percent and 9.9 percent in 1992 and 1999, respectively.
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merchanting and trade services accounted for 11.8 percent of exports of commercial services and royalties in the June 2005 year, compared with 6.6 percent and 4.8 percent in 1992 and 1999, respectively. Merchanting is the main contributor; this value represents sales less purchases of goods by New Zealand enterprises, where the goods do not enter New Zealand, and is recorded as a net export value. Contributions to the growth in merchanting services includes situations where New Zealand companies have production of finished goods undertaken abroad. (The definition and measurement of merchanting is further discussed in the technical notes.)
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personal cultural and recreational services accounted for 10.3 percent of exports of commercial services and royalties in the June 2005 year, compared with 3.8 percent and 5.3 percent in 1992 and 1999, respectively; included in this item are fees for sports teams, film, TV and radio productions.
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royalties and license fees accounted for 6.2 percent of exports of commercial services and royalties in the June 2005 year, compared with 4.6 percent and 7.6 percent in 1992 and 1999, respectively.
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miscellaneous business, professional, technical and other services accounted for 35.8 percent of exports of commercial services and royalties in the June 2005 year, compared with 40.5 percent in 1999. This item encompasses a wide range of services, among them are legal, accounting, management (including management fees between subsidiary and parent enterprises), engineering, research and development and other technical services.
Imports of commercial services and royalties
Comparing the values for main service types with total purchases for the June year censuses of 1992, 1999 and 2005, shows that:
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computer and information services accounted for 10.1 percent of imports of commercial services and royalties in the June 2005 year, compared with 6.1 percent and 7.5 percent in 1992 and 1999, respectively.
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royalties and license fees accounted for 22.9 percent of imports of commercial services and royalties in the June 2005 year, compared with 21.3 percent and 21.7 percent in 1992 and 1999, respectively.
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miscellaneous business, professional, technical and other services accounted for 43.5 percent of imports of commercial services and royalties in the June 2005 year, compared with 50.3 percent in 1999.
Both exports and imports of communication services (which includes Internet and telecommunications, and postal and courier services) have fallen as a proportion of their respective exports and imports of commercial services and royalties. Exports in the June 2005 year were 16.5 percent compared with 26.4 percent in 1999, and imports in 2005 were 12.6 percent compared with 13.5 percent in 1999. Communications is a highly competitive sector and this, combined with the falling cost of technology, may have contributed to the fall in exports and imports of communication services share of total commercial services exports and imports in the most recent period.
Commercial services and royalties trading partner countries
Australia is New Zealand's most important commercial services and royalties trading partner. Of commercial services and royalties measured in the 2005 Census, Australia was the destination for $831 million (31.6 percent) of exports from New Zealand, and was the source of $1,253 million (35.4 percent) of imports to New Zealand. New Zealand's next most important commercial services trading partner is the USA – $529 million of exports are rendered to the USA (20.1 percent), and $943 million (26.6 percent) of imports are rendered from the USA. Australia and the USA are New Zealand's most important international investment partners. Statistics New Zealand published New Zealand's international investment partner country statistics for the March 2005 year on 28 September 2005.
New Zealand's top two commercial services trading partners (Australia and the USA) accounted for 51.8 percent of all New Zealand's commercial services and royalties exports measured in the 2005 Census, and 62.0 percent of all New Zealand's commercial services and royalties imports. Other important commercial services trading partners are the UK (7.0 percent of exports and 7.5 percent of imports), Japan (2.3 percent of exports), and the Netherlands (3.8 percent of imports).
The 2005 Census benchmark and the current account
The 2005 Census of commercial services and royalties follows earlier censuses in 1999 and 1992. In the intervening periods, a sample survey has operated each quarter. Each census provides an updated benchmark level of services transactions to supplement the quarterly sample survey data, and an updated survey population. As a result of the new information from the benchmark 2005 Census, revisions to previous quarters will be introduced to the services estimates in the Balance of Payments current account when the September 2005 quarter statistics are published on 21 December 2005. The September 2005 quarter statistics released in December will also contain revisions to the travel component of the current account. The total impact of these revisions has yet to be determined.
For technical information contact:
Salendra Kumar or Peter Roche
Wellington 04 931 4600
Email: info@stats.govt.nz