Building and machinery prices fall

The Capital Goods Price Index (CGPI) fell 0.4 percent in the September 2009 quarter, Statistics New Zealand said today. The most significant downward contributions came from the non-residential buildings index (down 1.4 percent), the plant, machinery, and equipment index (down 0.6 percent), and the residential buildings index (down 0.4 percent).

The 1.4 percent fall in the non-residential buildings index in the September 2009 quarter is the fourth consecutive fall. Lower labour and material costs for steel reinforcing and structural steelwork drove the latest fall. In the year to the September 2009 quarter, the non-residential buildings index fell 3.1 percent, which is the largest fall since the series began in the December 1989 quarter.

The second largest downward contribution to the CGPI in the September 2009 quarter was from the plant, machinery, and equipment index (down 0.6 percent). Respondents cited a higher New Zealand dollar as a reason for reducing the price for purchasing these assets.

The third largest downward contribution to the CGPI was from the residential buildings index (down 0.4 percent). The fall was due to lower labour and material costs for steel reinforcing and structural steelwork.

Offsetting influences this quarter came from rises in the transport equipment index (up 0.8 percent) and the other construction index (up 0.5 percent).

The CGPI rose 2.3 percent in the year to the September 2009 quarter, compared with rises of 3.8 percent in the year to the September 2008 quarter and 2.3 percent in the year to the September 2007 quarter.
Dallas Welch (Mrs) 16 November 2009
Acting Government Statistician