3 Jun 2014

Terms of trade best since 1973

11:39 am on 3 June 2014

The country's purchasing power with the rest of the world has risen for the fifth successive quarter, reaching levels not seen since the early seventies.

Official figures show the terms of trade, which measures the amount of imports that can be bought with a given quantity of exports, rose 1.8 percent in the first three months of the year.

The country's terms of trade with the rest of the world is at its highest level since 1973.

The country's terms of trade with the rest of the world is at its highest level since 1973. Photo: PHOTO NZ

It's now at its highest level since September 1973 and is 1.7% below its all time high in the June 1973 quarter.

Statistics New Zealand said the increase was because export prices are rising and import prices falling.

Export prices rose 0.8 percent, led by increases in dairy, meat and forestry prices.

Dairy prices have risen 42 percent since March last year, meat by 6.6 percent, and forestry by 10 percent.

The price of imports fell 1 percent, thanks to a higher dollar, which made goods cheaper.

Seasonally adjusted export volumes rose 1.6 percent led by meat products, which offset a decline in dairy.

Import volumes rose 2.3 percent, with the main contribution coming from plant and machinery.