Construction Drives Capital Goods Price Rise
Capital Goods Price Index: December 2005 quarter — 15 February 2006 Construction Drives Capital Goods Price Rise
The Capital Goods Price Index (CGPI) rose 0.7 percent in the December 2005 quarter, Statistics New Zealand said today. The rise was driven by a 1.6 percent increase in the residential buildings index, the most significant upward contributor to the CGPI for the seventeenth consecutive quarter.
The other construction index played a supportive role in the CGPI increase this quarter, up 2.0 percent, the largest rise since a 2.0 percent rise in the December 2000 quarter.
Higher construction component costs and increased labour costs were the most common reasons given for the increase in the residential buildings index this quarter, while respondents cited both increasing labour costs and fuel costs as the main drivers behind the rise in the other construction index.
In the December 2005 quarter, the plant, machinery and equipment index (down 0.2 percent) was the only index to record a fall, mainly due to exchange rate movements and lower supplier's prices. The plant, machinery and equipment index has fallen in 14 of the last 16 quarters, and the overall index is now 7.6 percent lower than in the March 2002 quarter.
In the year to the December 2005 quarter the CGPI increased 2.9 percent, following rises of 3.0 percent in the years to the September 2005 quarter and the June 2005 quarter. The residential buildings index rose 6.4 percent in the year to the December 2005 quarter. The other construction index rose 6.9 percent, the highest annual percentage increase since the series began in the
December 1989 quarter.