Residential buildings continue to push up CGPI

The Capital Goods Price Index (CGPI) rose 0.7 percent in the September 2007 quarter mainly due to higherconstruction prices for new houses, Statistics New Zealand said today.

This follows rises of 0.4 percent inthe June 2007 quarter and 0.3 percent in March 2007 quarter.

In the year to the September 2007 quarter,the CGPI rose 2.3 percent – the lowest annual increase since the December 2003 quarter (up 1.5percent).

This compares with a 4.0 percent increase in the year to the September 2006 quarter.

The residential buildings index rose 1.4 percent in the September 2007 quarter and made the mostsignificant upward contribution to the CGPI.

Higher construction prices for new houses was the main reasonfor this rise, driven by the high cost of construction components, increases in cost of fittings and highersubcontractors' charges.

In the year to the September 2007 quarter, the residential buildings index rose 4.8percent.Another upward contribution to the CGPI came from the other construction index, which rose 1.3 percent.

The increase was driven by higher costs for the construction of urban drainage and sewerage systems(mainly due to higher costs of concrete pipes) and increased costs of road construction work. In the year tothe September 2007 quarter, the other construction index rose 3.7 percent compared with the rise of 5.0percent in the year to the September 2006 quarter.

The only sub-index of the CGPI that recorded a decrease in the September 2007 quarter was the transportequipment index falling 0.1 percent mainly driven by the exchange rate and competition in the latestquarter