Dairy exports overtake travel as COVID-19 hits

Spending by international students and visitors in New Zealand fell $239 million in the year to March 2020, compared with the December 2019 year, Stats NZ said today.

“This fall is an early sign of the impact of COVID-19 on travel service exports,” international statistics senior manager Peter Dolan said.

“International students and visitors faced travel restrictions in the first three months of 2020, especially those coming from China in February, before the border closed to almost all but returning New Zealanders in late March.

“We will see the full impact of the border closure on tourism and travel services in the coming quarters. We already know that many students didn’t get to New Zealand for the start of the academic year and all visitor arrivals stopped in late March.

“That will see exports of travel services drop sharply, until the border is reopened.”

In contrast, dairy exports were up $396 million in the year to March 2020, boosting New Zealand’s trade surplus to $3.5 billion in the March 2020 year, up $1 billion on the surplus in the December 2019 year.

“As the impacts of COVID-19 measures took effect in late March, dairy products have held up total exports and overtook travel exports in revenue for the first time in almost five years,” Mr Dolan said.

Dairy products were New Zealand’s top goods export in the March 2020 year at $16.2 billion.

Travel services was New Zealand’s top services export in the March 2020 year at $15.9 billion.

“Both dairy and travel services are key export earners for the New Zealand economy, making up over a third of our total exports,” Mr Dolan said.

Through the 1990s and 2000s, holidaymakers and international students earned more export revenue than dairy products. In the September 2010 year, dairy export earnings took over and became New Zealand’s top export earner through the dairy boom of 2014. As dairy prices and export earnings fell near the end of 2014, travel took off, as annual visitor arrivals continued to rise.

“The popularity of New Zealand as both a tourist destination and a place to study has meant travel services have been our top export earner since the June 2015 year, but that ended in the March 2020 year,” Mr Dolan said.

Travel service exports are made up of spending by international holidaymakers (other personal travel services), people travelling for business (business travel services) and the tuition fees and living expenses of international students studying in New Zealand (education travel services).

The fall in travel service exports in the March 2020 year was mainly due to a fall in education travel services, down $148 million compared with the December 2019 year. This was followed by a fall in other personal travel, down $106 million.