NZ recorded its third straight quarterly rise in the merchandise terms of trade in Q3. It rose 2.4% q/q to be up 1.2% y/y, the first positive annual rate since Q1 2022, after +2.1% q/q and -1.7% y/y in Q2, while services fell 0.9% q/q and 5.7% y/y. The improvement was driven by both goods export and import prices which rose 0.7% q/q and fell 1.7% q/q respectively. While the better terms of trade is positive for the economic outlook, Q3 merchandise net export volumes were soft. 

• Services import prices exceeded exports at 1.7% q/q compared to +0.7%.
• Goods export volumes fell 1.8% q/q while imports rose 3.0% after -4.3% and +3.1% in Q2.
• Q3 exports of goods and services values grew 2.9% y/y while imports were flat. Merchandise exports rose 4.4% y/y while services fell 0.7%. 

NZ terms of trade y/y%