NZ producer input and output prices rise in second quarter, led by fuel costs
By Jason Krupp
Aug. 17 (BusinessDesk) - New Zealand producer prices for inputs and outputs rose in the second quarter, largely on the back of increased fuel costs, although the pace was slower than in the first three months of the year.
Producer input prices rose 0.9% in the three months to June 30, lower than the 2.2% increase recorded in the first quarter of this year, according to Statistics New Zealand. That marks the seventh straight quarterly increase in input costs. Output prices across all goods and services industries rose 1.4% in the June quarter, marginally down from the 1.7% increase in the March quarter.
Input prices in the June quarter were driven by an 8.4% increase in cost of textile, leather, clothing and footwear manufacturing, a 5.5% increase in meat and meat product manufacturing, and a 3.4% increase in petroleum and coal product manufacturing, largely reflecting high higher costs at the pump for diesel and petrol.
The data suggests the strength of the New Zealand dollar, which rose 8.1% in the June quarter, wasn’t enough to offset increased input prices in the period.
The largest input cost decline came from dairy product manufacturing, with the sub-index falling 1.8% due to lower farm-gate milk prices, the first fall since the September 2009 quarter.
Output prices were driven by fuel costs in the quarter, with the petroleum and manufacturing index gaining 10.5% in the period. The second biggest output cost contribution came from dairy product manufacturing, which rose 5.1, on the back of higher milk powder prices. Telecommunication and internet costs saw the biggest downward contribution in the period, falling 6.1% in the quarter
On an annual basis, PPI input prices rose 4.8% compared the June quarter last year, while PPI output prices rose 4.5% compared the same period a year ago.