NZ producer prices show tepid growth in December

Feb. 20 (BusinessDesk) – New Zealand manufacturers continued to report tepid input and output price inflation in the final three months of last year, embedding the idea that the Reserve Bank won’t have to hurry to raise interest rates.

The Producer Price Index’s input prices, which measure the change in price of goods and services used by the productive sector, rose 0.5 percent in the three months ended Dec. 31, slowing from a two-year-low pace of 0.6 percent in the September quarter, according to Statistics New Zealand.

A 3.8 percent fall in electricity, gas and supply prices was the biggest downward contributor, offsetting the rebound in prices paid to dairy farmers by manufacturers.

On an annual basis, dairy product manufacturers’ input prices have dropped 3.1 percent, unwinding some of the high farmgate prices paid during the 2010/11 season.

Across all industries, input prices rose 4.2 percent.

The PPI’s output prices, which measure changes in the price of goods and services produced locally, rose 0.1 percent, the slowest pace since December 2009. A 3.2 percent fall in the price of horticulture and fruit growing damped gains in meat and dairy prices, with a bigger than normal vegetable supply holding down prices.

Output prices rose 3.4 percent annually. The annual price paid to dairy farmers fell 4.7 percent as farmgate prices came off highs from the year before.

In a separate release, the capital goods index rose 0.4 percent in the December quarter, led by a 1 percent gain in the civil construction prices and a 0.4 percent rise in residential building prices.

Statistics NZ said civil construction was mainly influenced by rising wages for roading and railway construction materials, while more expensive residential housing came from rising costs of building new dwellings.

(BusinessDesk)

BUDGET 2012:
Parliament Debate Live - Video Of Budget 2011
Keith Ng Interactive Graphic: How the Budget Breaks Down
BUDGET 2012 - FULL COVERAGE: Reports / Analysis - Press Kit - Reaction (from everybody) - Previews (from everybody) - Pre-Budget Announcements

Gordon Campbell: On the Budget’s Spreadsheet Victories

It wasn’t as if expectations were sky high, exactly. Chances are, it was always more likely that we’d be seeing Bigfoot rampage through the Beehive lock-up than catch a glimpse of a credible growth agenda from this government. More >>

Sludge Budget Report - Short The Dollar! MEMO: To international bankers FROM: C.D. Sludge Please short the dollar! It'll be good for both you and us. And you know you want to. Greexit, Eurogeddon... watch out... flight to quality and all that. Follow your instincts. The NZ Debt Management Office has been so surprised at the unprecedentedly low interest rates that it can borrow at that it has already entirely pre-funded the 2013 fiscal deficit - all $8 billion of it! More >>

Pattrick Smellie Comment: Doddling along the best we can hope forCriticising Budgets for lacking vision or imagination is like shooting fish in a barrel, but even so, this year's Budget again feels like a missed opportunity. Perhaps it's the intrusion of real world needs that means the government couldn't make better political use of the $558.8 million it expects to gather in its first partial asset sale. More >>