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Producer Prices Pick Up
Producers Price Index - June 1999 quarter
The average level of output prices, as measured by the Producers Price Index, increased by 0.4 per cent in the June 1999 quarter. This follows falls of 0.3 and 0.4 per cent in the December 1998 and March 1999 quarters respectively. Improved prices for horticultural commodities contributed most to the overall rise in output prices this quarter.
Nearly 20 per cent of the overall rise in the PPI All Industries outputs index was accounted for by a rise in the wholesale trade outputs index. Deputy Government Statistician, Ian Ewing, said that this was driven by an increase in prices received for horticultural products. In particular, kiwifruit prices rose due to a shortage of supply, and pipfruit prices also increased. Improved fruit and vegetable prices were also reflected in the horticulture and fruit growing index, which provided the second largest contribution to the rise in output prices.
Beef prices increased this quarter due to an increase in demand, particularly from Asian markets, said Mr Ewing. This drove the 2.6 per cent increase in the meat and meat product manufacturing outputs index contributing the third largest rise in overall output prices.
A fall in the petroleum, coal and basic chemical manufacturing outputs index partially offset the overall rise in output prices. Mr Ewing said that this was driven by a fall in the petroleum refining fee, which was influenced by weak Asia Pacific oil refining margins.
Input prices rose 0.6 per cent in the June 1999 quarter. A 3.1 per cent increase in the wholesale trade inputs index accounted for more than 50 per cent of the overall rise in the inputs index. Mr Ewing said that this was largely attributable to a rise in crude oil prices, which analysts attribute to OPEC's restraint initiative agreed upon last March.
As a result of the
high demand for cattle to rebuild stock levels, the input
price of prime beef rose. This drove the rise in the meat
and meat product manufacturing inputs index, which provided
the second most significant contribution to the overall
increase in input prices.
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