Building construction drives up CGPI

Embargoed until 10:45am – 16 May 2008

Building construction drives up CGPI

The Capital Goods Price Index (CGPI) rose 0.5 percent in the March 2008 quarter, Statistics New Zealand said today. Higher construction prices for new houses and non-residential buildings were the main contributors to the rise. Four of the six asset groups in the CGPI rose in this quarter.

The residential buildings index made the most significant upward contribution to the CGPI, rising 0.9 percent in the March 2008 quarter. The increase was mainly due to higher construction prices for new houses driven by higher prices for construction components and increased subcontractors’ charges. In the year to the March 2008 quarter, the residential buildings index rose 5.0 percent.

The second largest upward contribution to the CGPI came from the non-residential buildings index which rose 1.0 percent in the March 2008 quarter. This rise was mainly driven by higher prices for reinforcing steel products and increased costs for structural steel work. In the year to the March 2008 quarter, the nonresidential buildings index rose 2.3 percent.

Price decreases recorded in the plant, machinery and equipment index and the transport equipment index offset the CGPI increase. Both of these indexes fell by 0.1 percent in the latest quarter largely due to the appreciating exchange rate.

In the year to the March 2008 quarter, the CGPI rose 2.5 percent. This followed a rise of 3.6 percent and 3.1 percent in the years to the March 2007 and March 2006 quarters, respectively.

Geoff Bascand
Government Statistician
16 May 2008

ENDS

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