Overview – census results provide a picture of New Zealand's international service sector
The results of the Census of International Trade in Services and Royalties provide an accurate picture of imports and exports of commercial services by New Zealand companies. Statistics New Zealand ran the last Census of International Trade in Services and Royalties in 2005. In this release, results from the year ended June 2011 Census are compared with results from the year ended June 2005 Census.
Revisions to the quarterly balance of payments for the Balance of Payments and International Investment Position: June 2012 quarter release will incorporate the census results. This will be published on 21 September 2012, with revisions back to the September 2005 quarter.
Globalisation contributes to the rise in commercial services
Exports of commercial services accounted for 29.6 percent of New Zealand's total service exports in 2011, compared with 19.8 percent in 2005. Exports of commercial services have steadily increased each census year (from 13.1 percent in 1992).
Imports of commercial services accounted for 39.8 percent of New Zealand's total service imports, compared with 30.3 percent in 2005. Imports of commercial services have increased from 26.5 percent of total services in 1992.
One driver of the increase in trade of commercial services was management fees between related parties. New Zealand companies supplied $512 million of services to their subsidiaries abroad. New Zealand companies also paid $1,156 million in management fees to their foreign owners – an $821 million increase since 2005.
Management fees between related parties include charges for managerial and administrative services, and charges for accounting, computer services, and royalties. These are often invoiced collectively and cannot be separated by some survey respondents. As a result, imports and exports of management fees cover a range of business services.
The growth of management fees reflects the increasing presence of New Zealand companies abroad, and foreign companies in New Zealand.
Exports of most services increase
Compared with 2005, exports of most service types rose in 2011. Exports of computer services, management fees, and royalties had the most significant rises.
Revenue from information technology up
New Zealand companies provided $482 million of computer services to foreign customers during 2011, up $230 million from 2005. New Zealand companies designing software and providing technical support for overseas clients were the largest contributor.
New Zealand companies also received $186 million in software royalties from abroad, up $116 million from 2005.
Revenue from movie and television production increases
New Zealand companies provided $272 million of audio visual services to foreign customers. This was driven by the production of movies and television series in New Zealand.
Imports of services increase
Imports of most service types rose when compared with 2005. Imports of management fees, computer services, and engineering had the most significant rises. Imports of communication and research and development services fell.
Imports of information technology services up
New Zealand companies paid $576 million for computer services supplied by foreign companies in 2011, up $295 million from 2005. Computer services accounted for 10.0 percent of total commercial service imports. This percentage has been increasing steadily from 4.5 percent in 1992. New Zealand companies also paid $251 million in royalties for the use of foreign software.
Royalty payments to non-residents for broadcast rights, brand names, and franchise rights were $796 million in 2011, up $189 million from 2005.
Offshore oil drilling increases service imports
New Zealand companies paid $552 million for architectural, engineering, and other technical services provided by foreign companies in 2011, up $391 million from 2005. Companies using overseas expertise for oil exploration and extraction drove this increase. The New Zealand oil industry has grown since 2005, with the Pohokura, Tui, Maari, and Kupe oilfields all beginning production during this period.
Companies pay $44 millon to have goods manufactured abroad
New Zealand companies paid $44 million in contract manufacturing fees to overseas companies and received $12 million in contract manufacturing fees. Statistics NZ collected data on these services for the first time in the 2011 Census of International Trade in Services and Royalties.
Australia, United States, and the United Kingdom remain New Zealand’s key trading partners in commercial services
Exports to Australia, the United States, and the United Kingdom represented 64.2 percent of total commercial exports in 2011, compared with 63.4 percent in 2005. Imports from Australia, the United States, and the United Kingdom represented 66.4 percent of total commercial imports in 2011, compared with 69.6 percent in 2005.
Australia remains New Zealand’s top service trading partner
Australia remained New Zealand’s top trading partner for commercial services for the year ended June 2011.
Exports to Australia were $1,449 million. The main components were:
- management fees to related parties of $224 million
- computer services of $192 million
- royalties of $169 million.
Imports from Australia were $2,313 million. The main components were:
- management fees to related parties of $627 million
- computer services of $370 million
- royalties of $265 million.
Exports of commercial services to Australia as a percentage of total commercial services have increased steadily each census year, from 23.2 percent in 1992 to 36.3 percent in 2011. Likewise, imports from Australia have increased from 24.7 percent to 40.1 percent.
The trade in commercial services between New Zealand and Australia complements Australia's position as our most significant goods trade and investment partner. Many New Zealand companies have subsidiaries or branches in Australia, and there are many subsidiaries or branches of Australian companies in New Zealand. Once this direct investment relationship is established, there is often trade in services between related enterprises.
Exports to the United States driven by motion pictures and television
The United States remained our second-most significant commercial services trading partner. Exports to the US were $867 million during 2011.
Exports were driven by personal, cultural, and recreational services of $228 million. This includes revenue received for the production of motion pictures and television in New Zealand.
Imports from Asia on the rise
Imports of commercial services from Singapore and China represented 8.1 percent of total commercial service imports, up from 2.9 percent in 2005. This was driven by an increase in engineering services associated with offshore oil drilling and extraction.
Imports of commercial services from India represented 1.2 percent of total commercial service imports, compared with 0.3 percent in 2005. This was driven by a rise in management fees, and information technology consulting and support services.
Exports led by information and technology; imports spread across industries
Table 7 in the downloadable Excel file of this release presents the total imports and exports of services by industry.
Analysis of services trade by industry reveals that exports were driven by information and technology-related industries, while imports were more evenly spread across industries.
Information and technology-related industries drive exports
The professional, scientific, and technical services industry remained the largest exporter of commercial services in 2011, when compared with 2005. Companies in the computer systems design industry provided $628 million of services, while companies in the other professional, scientific, and technical industry provided $784 million of services. The information media and telecommunications industry was the second-largest exporter.
Imports spread across industries
New Zealand companies purchased a range of services from abroad, with the type of service often not being specific to the industry. For example, many industries purchase computer services from abroad.
Some companies do purchase services specific to their industry. Two examples are:
- the wholesaling and manufacturing industries that pay royalties to use brand names and processes related to manufacturing and selling goods
- the information, media, and telecommunications industry that pays broadcast fees to overseas owners or producers of film and television.
Most common way to export services was by the Internet, email, or phone
For the first time, Statistics NZ collected information in the 2011 Census about how commercial services were delivered. This is referred to as the mode of supply.
Cross-border supply was the most common way to export commercial services, accounting for 85.8 percent of exports. This is when New Zealand companies provide services to foreign customers by the Internet, email, or phone. This illustrates New Zealand’s geographic isolation and reliance on communication networks to deliver services to foreign customers.
Employees of New Zealand companies providing the service overseas accounted for $463 million of exports. Overseas customers travelling to New Zealand to receive the service accounted for $105 million.
While most commercial services were delivered by the Internet, email, or phone, some industries required a physical presence to deliver the service.
In the June 2011 year, 28.0 percent of total technical and professional services were delivered by employees of New Zealand companies temporarily working overseas. This was driven by New Zealand engineers working on overseas project sites.
A significant percentage of miscellaneous services were also delivered by employees of New Zealand companies working overseas (36.2 percent). This was driven by New Zealand teachers consulting and teaching overseas for less than one year.
For more detailed data see the Excel tables in the 'Downloads' box.