About the Overseas Trade Indexes (Prices) release
The Overseas Trade Indexes (Prices) measure changes in the prices of imports and exports of goods and services. This release provides information about price movements in five indexes.
- The overseas merchandise trade price indexes measure changes in the price levels of imports and exports of merchandise trade to and from New Zealand.
- The overseas services trade indexes measure changes in price levels of imports and exports of services to and from New Zealand on a quarterly basis.
- The overseas terms of trade index measures the changing volume of merchandise imports that can be funded by a fixed volume of New Zealand's merchandise exports.
Each index shows how a set of prices has changed over time. It is the change between two index numbers that is important. An individual index number has no meaning.
About the terms of trade
The terms of trade measures the changing volume of merchandise imports that can be funded by a fixed volume of New Zealand's merchandise exports. The merchandise terms of trade index is calculated as the ratio of the total export price index to the total import price index. This is then presented on an index reference period for the quarter ended June 2002 (=1000).
Broad economic categories (BEC): are arranged, as far as practical, to align with the System of National Accounts’ three basic classes; namely capital goods, intermediate goods, and consumption goods. Commodities in BEC are categorised based on their main end use. This means, for example, that all digital cameras are treated as consumption goods even though some are used in business.
Capital goods: produced assets used repeatedly or continuously for longer than one year in industrial production processes. Examples are machinery, trucks, and aircraft.
Consumption goods: goods used (without further transformation in industrial production processes) by households, government, or non-profit institutions serving households.
There are three types of consumption goods:
- durables have an expected usage of three years or more, eg appliances, furniture
- semi-durables have an expected usage of one or two years, eg footwear, clothing, games, toys
- non-durables have an expected usage of less than a year, eg medicines, cosmetics, yarns, books.
fob: free on board (the value of goods at New Zealand ports before export), which includes the cost of the goods plus the cost (including loading charges) of putting them on a vessel or aircraft.
Government services (exports): includes sales of capital assets excluding land, estimated expenditure of foreign embassies in New Zealand, the portion of the government's international aid spent in New Zealand, and the government's receipts from immigration fees.
Government services (imports): operational expenses of New Zealand's embassies overseas and the costs of the New Zealand defence forces stationed overseas.
Index reference period: is the benchmark to which prices in other periods are compared (eg if the index number in a later period is 1150, prices have increased by 15 percent since the index reference period). Prices for later periods can also be compared in a similar fashion. The overseas merchandise trade indexes have an index reference period of the June 2002 quarter (=1000). The overseas services trade indexes have an index reference period of the June 1997 quarter (=1000).
Intermediate goods: goods used up or transformed in industrial production processes.
Merchandise trade: exports or imports of goods that increase or decrease the stock of material resources in New Zealand. Includes goods leased for a year or more.
Other services: services other than transportation, travel, and government services. Examples are insurance, royalties and licence fees, banking and financial services, computer and information services, telecommunications, and personal, cultural, and recreational services.
Price index: measures the change in price between time periods for a given set of goods or services. It summarises a set of prices for a variety of goods or services.
Re-exports: exported goods that were previously imported into New Zealand and that include less than 50 percent New Zealand content by value.
Transportation: the international carriage of goods and passengers. Includes freight, airfares, port services, and stevedoring.
Travel (exports): what overseas visitors spend while travelling in New Zealand, and the expenditure by international students in New Zealand.
Travel (imports): what New Zealanders spend while travelling overseas.
vfd: value for duty (the value of imports before insurance and freight costs are added).