Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Data Flash: Producer Prices Q2/2000

Data Flash: Producer Prices Q2/2000

Data Flash (New Zealand) Producer Prices Q2/2000

Key Points

Producer input prices rose 1.2% qoq in Q2 and were 5.5% higher than in mid-1999. Producer output prices rose 1.0% qoq and were 3.9% higher than last year. Higher commodity prices and the flow-on effects into manufacturing production and the distribution sector were the key drivers of both indexes. Surprisingly, despite the collapse in building activity, construction cost inflation continued at an annualised rate of around 2.5%.

Key Points

The PPI data confirmed the upstream price pressure in the NZ economy related to high prices of oil and other commodities, as well as the weak NZD. The PPI data is consistent with our estimate of Q2 import price inflation in excess of 4% qoq (data to be released on 11 September). Such a figure and the continued NZD decline highlights the significant upside risk to the RBNZ's forecast of -0.6% for import price inflation over the year to March 2001. Upstream price pressures and flow-on effects into the CPI are going to be significantly more problematic than the Bank acknowledged in its latest Policy Statement. Comments by importers and major retail chains about the inability to hold prices in the light of external cost pressure have weakened the argument that soft domestic demand will prevent a major pass-through into the CPI. We continue to forecast annual CPI inflation to reach 3% over the next few quarters and remain above 2% for a prolonged period. It will be a major challenge for the RBNZ to prevent trend inflation from settling above 2% without obstructing the required adjustment of the economy to a lower dollar.

This, along with an extensive range of other publications, is available on our web site

In order to read our research you will require the Adobe Acrobat Reader which can be obtained from their website for free.

For answers to your EMU questions, check Deutsche Bank's EMU web site or email our helpline

© Scoop Media

Business Headlines | Sci-Tech Headlines


OECD On NZ: NZ's Living Standards Framework Positive But Has Gaps

Treasury’s living standards framework reflects good practice internationally but has some data gaps, including in areas where New Zealand fares poorly, the Organisation for Economic Cooperation and Development says. More>>


RBNZ Act Review: Govt Plans Deposit Guarantee Scheme

The Coalition Government today announced moves to make New Zealand’s banking system safer for customers through a new deposit protection regime, and work to strengthen accountability for banks’ actions. More>>


Conduct Review Response: Banks Commit To Removing Sales Incentives

The FMA and Reserve Bank of New Zealand said today that all banks had committed to remove sales incentives from frontline staff and their managers. More>>

Consumer Report: Insurance Market Complaints And Uncertainty

Consumers are paying more than ever for insurance but they’re not getting a fair deal, Consumer NZ’s latest report on the industry shows. More>>


Workers “Blind-Sided”: Sanford Processing Restructure Plan

Up to 30 jobs – almost half Sanford’s Bluff workforce - could be lost if the proposal to move white-fish processing to Timaru goes ahead. More>>