Electricity generation and supply push up output prices

Producers prices increased in the June 2007 quarter, with output prices up 1.2 percent and input prices up 1.3 percent, Statistics New Zealand said today.

The rise in output prices was due to higher electricity generation and supply prices and the main driver for the rise in the input index was increased wholesale trade prices.

The electricity generation and supply outputs index rose 9.7 percent in the latest quarter, the largest rise since the June 2003 quarter (also up 9.7 percent).

Higher spot market prices for electricity drove the rise. In the year to the June 2007 quarter, the electricity generation and supply output index fell 4.6 percent, compared with a rise of 25.3 percent in the year to the June 2006 quarter.

Partly offsetting the overall rise in Producers Price Index (PPI) output prices were falls in the meat and meat product manufacturing index (down 4.4 percent) and the livestock and cropping farming index (down 1.7percent).

In the PPI inputs index, the wholesale trade index rose 3.4 percent mainly driven by increased prices in the mineral, metal and chemical wholesaling sector.

From the June 2006 quarter to the June 2007 quarter, thewholesale trade index fell 1.7 percent following a 20.9 percent rise in the year to the June 2006 quarter.

The most significant downward contribution to the PPI inputs index in the June 2007 quarter came from the meat and meat product manufacturing index (down 3.7 percent).

The main driver for the fall was lower wholesale prices for livestock, especially bulls.In the year to the June 2007 quarter, the PPI outputs index rose 1.5 percent and the inputs index rose 1.2percent.