Value of merchandise trade imports

IBISWorld forecasts the value of merchandise trade imports to increase by 2.0% in 2025-26, to $81.70 billion. Merchandise trade imports were up by around 3.8% in the first quarter of 2025-26 and by 1.0% in the second quarter. Strong import value in June, particularly for petroleum and petroleum products, has contributed to a more optimistic estimates for the remainder of 2025-26. However, a modest rise in the value of merchandise trade imports is expected across the year, as import prices continue to grow at a slower pace when compared with the high levels seen in 2022-23.

The value of merchandise imports has fluctuated but risen over the past five years. The New Zealand dollar has depreciated over the past five years, causing the costs of most major imported goods to rise. However, this trend has had a mixed effect on international imports. On the one hand, higher prices for imported goods have limited demand from some consumers, particularly for discretionary items, while on the other hand, New Zealand's limited manufacturing base means consumers are often largely dependent on imports of manufactured goods. Specifically, refined petroleum, road vehicles and machinery products comprise the largest import categories into New Zealand, due to the conclusion of petroleum refinement in New Zealand a few years ago. This reliance on foreign manufacturing makes import demand relatively price-elastic. Changes in the value of the New Zealand dollar are often directly passed onto the consumer, which can cause the value of total merchandise imports to fluctuate. Overall, the depreciation of the New Zealand dollar over the past five years has contributed to the rising total value of imports over the period.

Imports declined substantially in 2020-21, due to the impact of the pandemic. Government restrictions on travel saw demand for fuel and motor vehicles decline rapidly. Additionally, falling global demand for fuel as a result of the pandemic drove sharp price declines, exacerbating the fall in value of imports. Furthermore, poor domestic economic conditions as a result of these and other government restrictions, saw consumers hold back on spending on discretionary goods, many of which are imported from overseas. Nevertheless, when restrictions were lifted, a surge of spending, fuelled by pent-up demand, along with strong domestic and international inflationary pressures that stemmed from supply chain bottlenecks conspired to result ina significant recovery in the value of imports in 2021-22 and 2022-23. Large spikes in oil prices caused the value of refined petroleum imports to skyrocket, due to the conclusion of domestic refinement. New Zealand's reliance on imported fuel meant that these price increases had a limited effect on demand. The value of road vehicle imports also jumped as consumers were able to travel again following the relaxation of pandemic restrictions.

The total value of merchandise trade imports slumped in 2023-24. Petroleum import prices fell significantly after reaching record highs in 2022-23. A spike in demand for petrol imports offset some of the impact of this trend on the value of petroleum product imports. The volume of road vehicle imports also fell significantly. Given petroleum and road vehicles construct around 20.0% of New Zealand's imports, the poor performance of these commodities was a significant driver of the 11.2% decline in total value of merchandise trade imports 2023-24. Weak household economic conditions, including low consumer sentiment and household discretionary incomes constrained consumer spending, which limited demand for imports. The inflationary pressure is gradually easing over recent years, thanks to rate cuts. This supports an improvement in the total value of merchandise trade. Overall, IBISWorld forecasts the value of merchandise trade imports to rise at a compound annual rate of 7.4% over the five years through 2025-26. Major drivers of this five-year trend have been rising prices for petroleum imports and increasing volumes of road vehicle and electrical machinery imports.