Capital Goods Price Index: December 2004

Capital Goods Price Index: December 2004 quarter — 22 February 2005 Capital Goods Price Index Continues to Rise

Prices for capital goods have continued to rise, according to Statistics New Zealand. An increase of 0.8 percent in the Capital Goods Price Index (CGPI) in the December 2004 quarter follows increases of 0.6 percent in the September 2004 quarter and 1.5 percent in the June 2004 quarter.

Building costs continued to increase, causing the residential buildings index to rise 1.7 percent in the December 2004 quarter. This is the ninth consecutive quarter in which the residential buildings index has made the most significant upward contribution to the CGPI. The non-residential buildings index also rose in the December 2004 quarter, by 1.8 percent. Respondents cited the main driver for price rises in both of these indexes as higher prices for construction components .

A consistent feature of the CGPI since the March 2002 quarter has been falling plant, machinery and equipment costs. The plant, machinery and equipment index fell 0.2 percent in the December 2004 quarter, its twelfth successive quarterly fall. Respondents most commonly cited changes in exchange rates as the reason for price decreases within the plant, machinery and equipment index. Raw materials, supplier and sub-component prices were the main factors affecting the price increases reported in this quarter.

A fall of 2.5 percent in the index for computer machinery was the most significant downward contribution to the plant, machinery and equipment index.

The transport equipment index fell 0.3 percent in the December 2004 quarter, with price decreases most commonly caused by changes in exchange rates, according to respondents. On an annual basis, the CGPI rose 3.9 percent in the year to the December 2004 quarter. This compares with a rise of 1.5 percent in the CGPI in the year to the December 2003 quarter.

Brian Pink

Government Statistician

ENDS

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