The rise of services in our economy

Mr Holborow was commenting on a summary report prepared by MFAT of New Zealand’s goods and services trade for the year ended March 2017.

Over the last two years, New Zealand's total exports were up 5.2 per cent ($3.2 billion) – above the global average. But the real star was the services sector which grew 18 per cent ($3.4 billion), more than off-setting a $221 million (-0.5%) decline in goods exports over that period.

“The decline in the value of goods exports can be largely attributed to the declining value of dairy exports (down $1.3 billion from 2015),” the report says.

“Tourism and education travel services have more than compensated for this decline, bringing in an additional $1.8 billion and $916 million respectively over the past two years.

“Growth in the value of other goods exports, namely fruit and logs, also partially counteracted this decline.”

The report noted that New Zealand’s dairy exports have also “recovered somewhat” over the past (March ended) year, increasing for the first time since their peak in 2014.

Mr Holborow said in the face of the soft goods story, the “current glamour kids on the block in the services sector” should be acknowledged.

“The overall goods and services growth [New Zealand] achieved of 5% growth is driven off an 18% increase in services exports over the last two years (up $3.4 billion). This services growth is beginning to emerge as a trend.

“In the last 5 years our services exports, as a percentage of total exports, have increased from 26% to 31%. Today tourism accounts for 13% of our total exports, commercials services 7%, education 5%, air transport 3% and 'other' is 3%.”