Output and Input Prices Rise

Output and Input Prices Rise

Output and input prices for all industries in the Producers Price Index (PPI) both rose by 0.4 percent in the September 2003 quarter, according to Statistics New Zealand.

The most significant upward contribution to the PPI outputs index for the September 2003 quarter came from the electricity generation and supply index, which rose 6.7 percent.

This follows a 9.7 percent rise in the June 2003 quarter, and a 12.9 percent rise in the March 2003 quarter.

For the third quarter in a row, the electricity generation and supply index has been the major upward contributor to the PPI outputs index. The main reason for the increases in all three quarters was higher prices received by electricity generators for bulk electricity sales.

Further upward contributions to the PPI outputs index for the September 2003 quarter came from the real estate index (up 1.6 percent) and the construction index (up 0.7 percent).

The construction index has shown an increase in the last 18 quarters, and is now 11.8 percent higher than it was in the March 1999 quarter.

These rises were offset by falls in the meat and meat product manufacturing index (down 3.3 percent), the dairy product manufacturing index (down 1.7 percent) and the forestry and logging index (down 4.3 percent). The main reasons for these decreases were lower world commodity prices and strong competition in the international market for forestry products. In the year to the September 2003 quarter, the PPI outputs index rose by 0.7 percent.

Input prices for all industries in the PPI rose by 0.4 percent in the September 2003 quarter, following a fall of 0.5 percent in the June 2003 quarter. In the year to the September 2003 quarter, the PPI inputs index rose by 0.1 percent.

The most significant upward contribution to the rise in the PPI inputs index in the September 2003 quarter came from the electricity generation and supply index, which rose 8.5 percent, reflecting higher prices paid by electricity retailers to generators. Other upward contributions came from the wholesale trade index (up 1.5 percent) and the meat and meat product manufacturing index (up 2.1 percent). These rises were partially offset by a fall of 2.9 percent in the paper and paper product manufacturing index, which was mainly the result of lower freight charges and lower pulp prices. Other downward contributions included a 2.8 percent fall in the wood product manufacturing index and a 1.8 percent fall in the printing, publishing and recorded media index.

Brian Pink

Government Statistician

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