RTTNews - New Zealand's output price index recorded a quarter-over-quarter drop for the second straight quarter, although the rate of decline slowed from the previous quarter. At the same time, annually, producer output price rose at its slowest pace since September quarter of 2007. The input price index remained unchanged on a quarterly basis but declined from the year-ago quarter.
According to a report released by Statistics New Zealand Wednesday, producer prices fell 0.7% in the June quarter compared to a 1.4% drop in the March quarter. The decline was in line with the 0.7% drop expected by economists. On a year-over-year basis, producer prices climbed 2.1%, a notable slowdown from the 6.5% increase in the previous quarter, and also marked the slowest pace of increase since September 2007, when prices climbed 2%.
The dairy product manufacturing prices index recorded the largest quarterly fall, down by 19.9% from the previous quarter, compared to the 24.3% decrease in the March quarter. It was followed by the petroleum, coal and basic chemical manufacturing index, which declined 8.2%.
The fall in output prices in the June quarter was partly offset by the finance index, which rose by 13.2% from the previous quarter, followed by the electricity generation and supply index, up 11%.
Meanwhile, the inputs price index showed no quarterly change in the June quarter. This follows a 2.5% fall posted in the March quarter and a 2.2% decline in the December quarter. Economists were looking for a 0.1% fall for the second quarter.
Annually, the input price index turned negative, dropping 1.2% in the second quarter following a 4.7% increase in the previous quarter. This is the first annual fall in input prices since the March 2004 quarter, when it fell 0.3%.
In terms of individual components, the sheet and fabricated metal product manufacturing index fell 6.7% sequentially in the second quarter, representing the steepest decline since the series began in June 1994 quarter.
The machinery and equipment manufacturing index dropped 4.5% in the June quarter compared to the previous quarter, which also represents a record fall. The quarterly fall was offset by electricity generation and supply, up 10.4%, and meat and meat product manufacturing, which climbed 4.9%.
In a separate report, the statistical office said the capital goods price index or CGPI rose 0.3% in the June quarter, slower than a 1.2% increase in the March quarter. This is the smallest quarterly rise since March 2007 quarter, when prices were up 0.3%.
The plant, machinery and equipment index rose 0.9% and made the most significant upward contribution to the index. Further, the transport equipment index rose 1.4%, other construction was up 1%, and land improvements increased 0.5%.
These were partly offset by a 1.1% fall in the non-residential building index and a 0.3% decline in the residential building index.
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