Australian producer prices were down 0.4 percent in the first quarter of 2009 compared to the previous three months, the Australian Bureau of Statistics said on Monday.

That was sharply lower than analyst expectations for a 0.6 percent quarterly advance following the 1.3 percent increase in the fourth quarter of 2008.

On an annual basis, PPI was up 4 percent versus forecasts for a 4.95 percent increase following the 6.4 percent gain in the previous three months.

The bureau said the Q1 decrease was largely due to mainly due to price decreases in building construction, petroleum refining and dairy product manufacturing - although the decline was partially offset by price increases in industrial machinery and equipment manufacturing and tobacco product manufacturing.

The statistics bureau also provided readings on Stage 1 or preliminary production prices, which declined 4.6 percent on quarter and added 4.3 percent on year, and on Stage 2 or intermediate prices, which fell 3.2 percent on quarter and increased 3.9 percent on year.

The movement in Stage 1 commodities was mainly due to price decreases in oil and gas extraction, basic chemical manufacturing and petroleum refining, the data showed. The decline was partially offset by price increases in motor vehicle and part manufacturing, marketing and business management services and industrial machinery and equipment manufacturing.

The decline in Stage 2 commodities was mainly due to price decreases in oil and gas extraction, basic chemical manufacturing, grain, sheep, beef and dairy cattle farming and petroleum refining, the ABS said. The easing was partially offset by price increases in motor vehicle and part manufacturing, marketing and business management services and industrial machinery and equipment manufacturing.

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