Lower fuel prices push down producer prices

Lower fuel prices push down producer prices

19 May 2015

Producer prices fell in the March 2015 quarter, due to lower fuel prices, Statistics New Zealand said today. Prices received (as measured by the output producers price index (PPI)) and paid (as measured by the input PPI) both fell in the March 2015 quarter, down 0.9 percent and 1.1 percent, respectively.

"Producers benefited from lower petrol and diesel prices. Lower fuel prices helped to lower input prices in many primary industries, and in construction and transport," prices manager Chris Pike said.

Output prices for the petroleum and coal product manufacturing industry fell 19 percent in the March 2015 quarter. This is the biggest quarterly fall since a 20 percent fall in the December 2008 quarter when fuel prices also fell sharply.

Sheep, beef, and grain farmers received lower prices in the March 2015 quarter (down 11 percent), influenced by drought conditions and higher slaughter levels. The prices received by meat and meat product manufacturers fell 2.4 percent.

Dairy cattle farmers received lower prices (down 4.6 percent). This is due to a further fall in the farm-gate milk price, reflecting volatility in international dairy commodity prices caused by over-supply in the market. Prices received by dairy product manufacturers fell 5.2 percent, reflecting lower prices for dairy exports.

In contrast, producers in the construction industry received higher prices (up 0.6 percent) in the March 2015 quarter. This was largely influenced by the prices for constructing new residential buildings (up 0.8 percent), as measured by the capital goods price index (CGPI), which was up 0.6 percent overall.

In the year to the March 2015 quarter, the output PPI was down 2.5 percent, and the input PPI fell 4.0 percent. The CGPI rose 2.8 percent.

Ends

For media enquiries contact: Chris Pike, Wellington 931 4600, info@stats.govt.nz

Authorised by Liz MacPherson, Government Statistician, 19 May 2015

For more information about these statistics:

• Visit Business Price Indexes: March 2015 quarter (includes Producers Price Index and Capital Goods Price Index)

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