Latest figures suggest the turmoil in world financial markets is starting to affect the demand for New Zealand's exports.
The seasonally-adjusted figures released by Statistics New Zealand show exports were down 4% to $3.8 billion despite a decline in the New Zealand dollar during the month. Imports rose a seasonally-adjusted 3.1%.
The result was a trade deficit of $641 million for the month - the first deficit since December and the largest shortfall since August 2009.
According to the statistics, the fall in August was led by lower exports of crude oil and aluminium and a fall in sales to Australia.
They show, however, that exports to China picked up strongly during the month.
Prime Minister John Key says strong growth in Asia is insulating New Zealand from the slowdown in the West but Radio New Zealand's economics correspondent says other figures show there are worrying signs there too.
Data from the Chinese government shows imports of whole milk powder - a big export from New Zealand - slumped 42% in August compared to the same month a year ago. New Zealand log exports to China are also faltering.
Agrifax - which monitors the agrticulture sector - says the steep fall in powder imports could be attributable to high stocks, rather than weak demand.
But Goldman Sachs economist Philip Borkin says the monthy data can be volatile and the overall trend is still postive.
Mr Borkin says the current annual trade surplus is running at close to a 17-year high and New Zealand has made encouraging progress in improving some of its external vulnerabilities. But he says the question is, can the improvements be expected to continue.
