Producers' output prices rise while input prices fall

Producers' output prices, as measured in the Producers Price Index, rose 1.4 percent and input prices fell 2.2 percent in the December 2008 quarter, Statistics New Zealand said today. The main contributor to the rise in output prices was the dairy product manufacturing index, while fuel wholesaling within the wholesale trade index, was the most significant contributor to the fall in the inputs index.

The dairy product manufacturing outputs index rose 19.2 percent in the December 2008 quarter, following a fall of 2.5 percent in the September quarter. The main driver of the index was higher export prices for dairy products such as milk powder, butter and cheese. Export prices declined in the December month, but were at higher levels during October and November, resulting in an overall quarterly increase (influenced by the depreciating NZ dollar).

The wholesale trade inputs index fell 11.7 percent in the December 2008 quarter, with lower prices for imported crude oil, a major input to fuel wholesaling, being the major driver of this fall. The fall in the wholesale trade index followed an 8.3 percent rise in the September 2008 quarter and a 9.0 percent rise in the June 2008 quarter.

Both output and input prices fell for electricity generation and supply in the December 2008 quarter. The electricity generation and supply outputs index fell 14.4 percent, while the inputs index fell 32.3 percent. The main reasons cited for these falls were lower spot market prices, lower demand, and an increase in the hydro lake levels.

In the year to the December 2008 quarter, the PPI outputs index rose 9.9 percent and the PPI inputs index rose 9.7 percent.