RTTNews - New Zealand's producer prices for inputs declined at a record pace in the first quarter, mainly due to lower prices of imported crude oil and aviation fuel, official data showed Monday.
Data released by the Statistics New Zealand revealed that producer input prices dropped 2.5% sequentially in the first quarter, faster than a 2.2% fall in the December quarter. Economists were expecting the input prices to be flat in the first quarter. This was the second consecutive quarter of decline in producer input prices, and the steepest fall since data was first released in the December 1977 quarter.
The largest negative contribution to the index came from the wholesale trade index, declining 12.7% in the first quarter, after falling 11.7% in the fourth quarter. Lower prices of imported crude oil, a major input to petroleum product wholesale selling was the main contributor to the fall.
The second largest negative contribution came from the air transport index, slipping 14.4% in the first quarter, following a 10.3% fall in the fourth quarter, and recording the steepest decline since the December 1997 quarter. The drop was mainly due to lower aviation fuel prices. The meat and meat product manufacturing index made the third largest negative contribution, falling 7.3% in the first quarter compared to an 8.6% drop in the preceding quarter. Partially offsetting the declines, the other food manufacturing index rose 1.8%, after a 1.6% increase in the fourth quarter.
Annually, producer input prices rose 4.7% in the first quarter, slowing from a 9.7% rise in the fourth quarter.
Meanwhile, the producer output price unexpectedly dropped 1.4% in the first quarter, after rising for seven straight quarters. In the fourth quarter, output prices were up 1.4%. Economists were expecting the producer prices to rise 0.5%.
During the March quarter, the dairy product manufacturing index had the largest downward effect on the output price index, plunging by a record 24.3% and reversing the 19.2% rise in the fourth quarter. The wholesale trade index was the second biggest contributor, falling 3.8% in the first quarter, the same pace as in the preceding quarter. On the other hand, the finance index climbed 14.6% compared to a 10% growth in the December quarter.
On an annual basis, the producer price for output grew 6.5% in the first quarter, slowing sharply from a 9.9% rise in the fourth quarter.
In another report, the statistical office said the capital goods price index or CGPI rose 1.2% sequentially in the March quarter, after a 1.1% increase in the December quarter. The most significant upward contribution was from the plant, machinery and equipment index, which rose 2.7%, mainly due to the depreciation of the New Zealand dollar. Compared to the previous year, the CGPI climbed 4.9% in the first quarter, which was the largest annual movement since the series began in the December 1989 quarter.
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