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

 

NZ Producer Prices (September 2000 Quarter)

Data Flash (New Zealand) NZ Producer Prices (September 2000 Quarter)

Key Points Producer input prices rose 3.8% qoq in Q3 and were 8.0% higher than last year (market expectations: +1.5%).

Producer output prices rose 2.7% qoq and were 5.6% higher than in 1999 (average expectation: +1.2%).

The outturn reflected the direct effect of higher commodity prices (oil and export commodities) and the increasing momentum of flow-on effects into other production sectors. Output prices rose by 7.8% qoq in the agriculture and forestry sector, 3.6% qoq in the manufacturing sector, 3.5% qoq in wholesale trade, 1.5% qoq in retail trade, 1.3% qoq in the transport sector.

Commentary Producer price data continues to confirm significant upstream price pressure in the NZ economy. The correlation between PPIs and the CPI reinforces our view that CPI inflation will rise to nearly 4% by the middle of next year. That projection assumes ongoing pressure on producer margins, which implies that there will be resistance to immediately passing on lower costs once oil prices begin to fall next year and the NZD gains some upward momentum. As a result of the re-building of margins, CPI inflation above 3% is likely to be more persistent than has been suggested by RBNZ projections. That, in turn, raises the risk of second-round effects through higher wage inflation. Our assessment of the inflation outlook relative to the mid-point of the 0-3% target band supports our expectation of further RBNZ tightening steps next year - beginning with a 25 bps increase in the OCR on 15 March.

Ulf Schoefisch, Chief Economist, New Zealand, (64) 9 351 1375

This, along with an extensive range of other publications, is available on our web site http://research.gm.db.com

In order to read our research you will require the Adobe Acrobat Reader which can be obtained from their website http://www.adobe.com for free.


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Media Mega Merger: StuffMe Hearing Argues Over Moveable Feast

New Zealand's two largest news publishers are appealing against the Commerce Commission's rejection of the proposal to merge their operations. More>>

Elsewhere:


Approval: Northern Corridor Decision Released

The approval gives the green light to construction of the last link of Auckland’s Western Ring Route, providing an alternative route from South Auckland to the North Shore. More>>

ALSO:


Crown Accounts: $4.1 Billion Surplus

The New Zealand Government has achieved its third fiscal surplus in a row with the Crown accounts for the year ended 30 June 2017 showing an OBEGAL surplus of $4.1 billion, $2.2 billion stronger than last year, Finance Minister Steven Joyce says. More>>

ALSO:

Mycoplasma Bovis: One New Property Tests Positive

The newly identified property... was already under a Restricted Place notice under the Biosecurity Act. More>>

Accounting Scandal: Suspension Of Fuji Xerox From All-Of-Government Contract

General Manager of New Zealand Government Procurement John Ivil says, “FXNZ has been formally suspended from the Print Technology and Associated Services (PTAS) contract and terminated from the Office Supplies contract.” More>>