Crude oil lowers producers' input prices

Producers' input prices, as measured in the Producers Price Index (PPI), fell 2.5 percent and output prices
fell 1.4 percent in the March 2009 quarter, Statistics New Zealand said today. Lower prices for imported
crude oil and for fuel made major contributions to the fall in input prices, while lower prices in the dairy
product manufacturing index drove down output prices. The 2.5 percent fall in the inputs index is the largest
since the series began in the December 1977 quarter.

Lower prices for imported crude oil (a major input to fuel wholesaling) contributed to a 12.7 percent fall in
the wholesale trade inputs index. The fall in the wholesale trade index followed an 11.7 percent fall in the
December 2008 quarter and an 8.3 percent rise in the September 2008 quarter.

The air transport index (down 14.4 percent) also made a significant contribution to the overall fall in input
prices. This fall is the largest since the series began in the December 1997 quarter and follows a 10.3
percent fall in the December 2008 quarter. Lower prices for aviation fuel were a major cause of the latest
fall.

The dairy product manufacturing outputs index fell 24.3 percent in the March 2009 quarter, following a 19.2
percent rise in the December 2008 quarter. The latest fall is the largest since the series began in the June
1994 quarter. Lower export prices for dairy products such as skim milk powder, butter and cheese were the
main drivers of the fall.

In the year to the March 2009 quarter, the PPI inputs index rose 4.7 percent and the outputs index rose 6.5
percent.

Geoff Bascand
Government Statistician
18 May 2009
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See also the Hot Off The Press information release Producers Price Index: March 2009 quarter.