ASB’s latest Economic Forecast Update paints a picture of a New Zealand export sector that is holding up remarkably well despite global turbulence, tariff shocks and a sluggish domestic economy.
The update, released today, highlights resilient export earnings as a key pillar of stability in an otherwise “bumpy” recovery, while flagging areas of risk that could influence future performance.
State of New Zealand exports
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Resilience amid tariffs and global uncertainty:
Despite a 15 percent US tariff on New Zealand goods coming into force in August, ASB notes that “New Zealand exports have generally performed resiliently,” with strong demand from key markets helping to offset the impact of protectionist trade policies. -
Primary sector strength:
Dairy, beef and kiwifruit continue to underpin export income, with robust US beef demand supporting prices and fruit and wine exports performing strongly. ASB maintains its milk price payout forecast of $9.75/kgMS, signalling confidence that dairy will “remain a breadwinner of growth” even as global conditions shift. -
Market diversification:
Exports to the US are stable despite tariffs, while China remains crucial, particularly for whole milk powder. However, ASB cautions that the yet-to-be-finalised US-China trade deal is “pivotal for New Zealand,” as slower Chinese demand stemming from adverse trade outcomes could complicate the export outlook. -
Tourism recovery:
Inbound tourism is sitting at about 87 percent of pre-COVID peaks, boosted by high-spending visitors from the U.S. and China. This is a significant secondary export earner, though ASB warns slower global growth could temper arrivals.
Outlook for the export market
ASB’s Chief Economist Nick Tuffley says resilient export performance, alongside improving consumer spending, provides a “foundation for growth,” even as domestic housing and labour markets remain weak.
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Global trade headwinds:
The US shift to protectionism is expected to weigh on global growth, with Consensus Economics forecasting global growth in 2025/26 to fall below its 30-year average. This adds uncertainty for New Zealand exporters reliant on demand in major economies. -
Risks from China:
The outcome of US-China trade negotiations remains a major swing factor for New Zealand, given China’s appetite for dairy and other primary exports. Any slowdown in Chinese demand could soften the positive export momentum. -
Monetary policy support:
ASB expects aggressive cuts to the Official Cash Rate (OCR), a 50bp cut in October and another 25bp in November, to help offset global headwinds. Lower rates should support the New Zealand dollar and enhance export competitiveness.
Key Takeaway
Exports remain the brightest light in New Zealand’s economic landscape, cushioning the economy against weak domestic demand and a sluggish housing market. Strong commodity demand, particularly in dairy, beef, kiwifruit, and wine, is keeping rural balance sheets healthy and supporting national income.
However, tariff risks, slower Chinese growth, and global trade realignments mean exporters face a challenging path ahead. ASB expects exports to stay resilient in the near term but stresses that the coming year will be “crucial” for sustaining growth as New Zealand navigates global trade shifts and domestic recovery.
