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Consumers Price Index review completed


Consumers Price Index review completed

A review of the goods and services in the Consumers Price Index (CPI) basket has been completed, Statistics New Zealand said today. The review, which updates the relative importance of the goods and services basket, will culminate in the publication of the reweighted CPI for the September 2008 quarter on 21 October 2008.

Periodic reviews of the CPI are undertaken to ensure that it remains relevant and up-to-date. The previous review was implemented in 2006.

The basket of representative goods and services has been reselected to ensure that it continues to reflect household spending patterns. Goods added to the basket as part of the review include heat pumps and cut flowers. High-tech products that have been added include in-car satellite navigation units, free-to-air digital television receivers, and digital music downloads. Services added to the new basket include lawn mowing, house cleaning and auction services, with the latter reflecting the growing popularity of online trading.

Goods removed from the basket include solid fuel burners, cathode ray tube television sets, video cassette tapes, photographic film and writing paper.

The main source of information used for the review was a survey of 2,600 households, which ran from July 2006 to June 2007. The survey collected detailed information on spending habits.

Based on the household survey and other information, Statistics New Zealand estimates that of every $100 spent by households on goods and services covered by the CPI, $22.75 is spent on housing and household utilities, compared with $20.02 in 2006. This reflects increased spending on renting and on purchasing new housing, and higher electricity prices.

Food accounts for $17.83 of every $100 spent, compared with $17.38 in 2006. The increase reflects an increase of 11.3 percent in food prices over the past two years.

Other groups have shown declines in relative importance, including transport (down from $17.24 to $16.18 of every $100 spent), with lower spending on cars contributing to the fall. However, the relative importance of petrol has increased to $5.47 of every $100 spent.

Statistics New Zealand today released information on changes arising from the review. For more information as well as a full list of goods and services that have been added to or removed from the CPI basket, read the paper, ‘Consumers Price Index, 2008 Review’.

Click here to read the FULL REPORT

Geoff Bascand

Government Statistician

7 October 2008

END

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