Producers' Input And Output Prices Increase
Producers Price Index: September 2001 quarter
Producers' input and output prices both increased in the September 2001 quarter, according to Statistics New Zealand's Producers Price Index (PPI). The PPI inputs index, which measures changes in the price of inputs to production, rose 2.0 per cent in the September 2001 quarter. The PPI outputs index, which measures changes in prices received by producers, rose 1.4 per cent in the same period.
Input prices increased 6.2 per cent from the September 2000 quarter to the September 2001 quarter and output prices increased 4.7 per cent over the same period. For both indexes, the annual rises recorded in the September 2001 quarter were the lowest annual increases since the June 2000 quarter.
The main contributors to the PPI inputs index were dairy product manufacturing, meat and meat product manufacturing, and electricity generation and supply. Food manufacturing contributed just over two-thirds and electricity generation and supply contributed nearly a quarter to the increase in the PPI inputs index.
The dairy cattle farming index and the electricity generation and supply index made the most significant contributions this quarter to the PPI outputs index. The increase of 21.5 per cent recorded for the dairy cattle farming index was due to end of season payouts to dairy farmers. Electricity generation contributed to most of the increase for the electricity generation and supply outputs index, which rose 13.2 per cent in the September 2001 quarter.
Higher prices for electricity generation were the result of the low levels of the hydro lakes, which lead to high prices for electricity on the spot market. Commercial consumers who were not paying contract prices, had to pay the high spot prices for electricity consumption.