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Construction and machinery drive up CGPI

Embargoed until 10:45am – 13 February 2008

Construction and machinery drive up CGPI

The Capital Goods Price Index (CGPI) rose 0.8 percent in the December 2007 quarter, Statistics New Zealand said today. Higher construction prices for houses and machinery prices were the main contributors to the rise. Five of the six asset groups in the CGPI rose in this quarter, while the transport equipment index continued to fall.

The residential buildings index made the most significant upward contribution to the CGPI, rising 1.2 percent in the December 2007 quarter. The increase was mainly due to higher construction prices for new houses driven by higher prices for construction components, increased subcontractors’ charges and higher prices for fittings. In the year to the December 2007 quarter, the residential buildings index rose 5.1 percent.

Another upward contribution to the CGPI index came from the plant, machinery and equipment index, which rose 0.6 percent in the December 2007 quarter. The main reasons for this rise were higher suppliers' prices for printing machinery and parts, and electrical insulator materials. In the year to the December 2007 quarter, the plant, machinery and equipment index rose 0.4 percent.

The transport equipment index fell 0.3 percent in the December 2007 quarter, its second consecutive quarterly fall. Respondents commonly cited the adjustment to profit margin as the main reason for lower prices for cars (1600cc and over), which contributed to the index decrease.

In the year to the December 2007 quarter, the CGPI rose 2.3 percent. This followed a rise of 4.1 percent and 2.9 percent in the years to the December 2006 and December 2005 quarters, respectively.

Geoff Bascand
Government Statistician
13 February 2008

ENDS

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