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Consumers Price Index: June 2012 quarter
Embargoed until 10:45am  –  17 July 2012
Commentary

CPI rises 0.3 percent in June 2012 quarter

The consumers price index (CPI) rose 0.3 percent in the June 2012 quarter. This follows a 0.5 percent rise in the March 2012 quarter and a 0.3 percent fall in the December 2011 quarter.

Eight groups had price rises in the June 2012 quarter. The housing and household utilities group (up 1.0 percent) made the main upward contribution.

The key individual upward contribution came from higher electricity prices (up 4.5 percent). Vegetable prices were up 11 percent, largely influenced by a higher-than-usual seasonal rise for tomatoes (up 98 percent). Prices also rose for:

  • beer (up 2.7 percent)
  • rentals for housing (up 0.5 percent)
  • purchase of new housing (up 0.9 percent)
  • international air fares (up 2.4 percent).

Two groups fell in price. The communication group was down 2.5 percent, and recreation and culture fell 0.3 percent.

The main individual downward contribution was lower prices for telecommunication services (down 2.5 percent). This reflected increased data caps for broadband plans and better-value cellphone services. Fresh milk (down 4.6 percent) and apple (down 19 percent) prices also fell.

Consumers price index groups: June 2012 quarter
Group Index points contribution to CPI Quarterly percentage change

Housing and household utilities
Alcoholic beverages and tobacco
Miscellaneous goods and services 
Transport
Health
Food 
Clothing and footwear
Education  
Household contents and services  
Recreation and culture
Communication

2.85
0.61
0.55
0.37
0.30
0.17
0.10
0.01
-0.01
-0.25
-0.94
1.0
0.7
0.7
0.2
0.4
0.1
0.2
0.1
0.0
-0.3
-2.5
All groups CPI 3.75 0.3
Note: Points contribution may not sum to total due to rounding.

 Graph, Index points contribution to consumers price index, June 2012 quarter.

CPI shows smallest annual increase since 1999 

The CPI increased 1.0 percent in the year to the June 2012 quarter, following increases of 1.6 percent and 1.8 percent in the years to the March 2012 and December 2011 quarters, respectively. The latest annual increase is the smallest annual movement since a 0.5 percent increase for the year to the December 1999 quarter. Six of the CPI's 11 groups made upward contributions for the latest year.

The main upward group contributions came from:   

  • housing and household utilities (up 2.7 percent) 
  • alcoholic beverages and tobacco (up 6.2 percent)
  • miscellaneous goods and services (up 3.4 percent).

The communication group (down 9.5 percent) and the recreation and culture group (down 3.2 percent) made the main downward group contributions.

The main individual upward contributions came from:

  • cigarettes and tobacco (up 13 percent, reflecting higher excise duty)
  • rentals for housing (up 2.3 percent)
  • electricity (up 3.7 percent)
  • purchase of new housing (up 2.8 percent)
  • second-hand cars (up 5.3 percent)
  • local authority rates and payments (up 4.6 percent)
  • beer (up 4.9 percent).

The main individual downward contributions came from lower prices for telecommunication services (down 9.1 percent), audio-visual equipment (down 19 percent), international air fares (down 5.3 percent), and vegetables (down 5.1 percent).

Higher electricity prices and rents push up housing and household utilities group 

Prices for the housing and household utilities group rose 1.0 percent in the June 2012 quarter. This follows rises of 0.7 percent in the March 2012 quarter and 0.3 percent in the December 2011 quarter.

Higher electricity prices (up 4.5 percent) made the key contribution in the June 2012 quarter, influenced by widespread electricity tariff increases.

Electricity prices previously peaked in the June 2011 quarter, then fell 0.3 percent in the September 2011 quarter and 0.5 percent in the December 2011 quarter. These falls reflected increases in prompt-payment discounts, consumers switching power companies, and lower summer rates in some regions. Switching is shown as price change in the CPI. Electricity prices rose 0.1 percent in the March 2012 quarter.

In the June 2012 quarter, higher rentals for housing (up 0.5 percent) also made a major contribution. This was influenced by rises in Auckland and some areas of the South Island outside Canterbury. Prices for the purchase of new housing (up 0.9 percent) also rose. Rises were highest in the Canterbury region and in the rest of the South Island.

Annual prices 

For the year to the June 2012 quarter, prices for the housing and household utilities group increased 2.7 percent. The key contributions were: 

  • rentals for housing (up 2.3 percent)
  • electricity (up 3.7 percent)
  • purchase of new housing (up 2.8 percent)
  • local authority rates and payments (up 4.6 percent).

Graph, Housing and household utilities group and selected indexes, Quarterly indexes, June 2008 quarter to June 2012 quarter.  

Higher international air fares and petrol prices offset by cheaper cars 

Transport prices rose 0.2 percent in the June 2012 quarter, following rises of 0.3 percent in the March 2012 quarter and 1.4 percent in the December 2011 quarter.

Higher international air fares (up 2.4 percent) made the key contribution in the June 2012 quarter. Air fares to Europe, North America, and Australia were all higher. International air fares sometimes rise in June quarters and sometimes fall. Domestic air fares rose 0.9 percent in the June 2012 quarter.

Petrol (up 0.4 percent) also made a significant contribution. Petrol prices were, on average, at their highest-recorded level in the June 2012 quarter, 0.2 percent higher than the previous peak in the June 2011 quarter. Petrol prices were unchanged through April and most of May 2012. Prices fell in late May and continued to fall throughout June 2012. If petrol prices remained at their end-of-June level throughout the September quarter, this would shave 0.4 of a percentage point off the September quarter CPI movement.

The key downward contribution to transport prices in the June 2012 quarter came from second-hand cars (down 1.0 percent). New car prices (down 0.7 percent) also fell, influenced partly by quality improvements and partly by price falls for some makes and models.

In the June 2012 quarter, road passenger transport prices also fell (down 2.6 percent), influenced by seasonally lower prices for hiring rental cars.

Annual prices

For the year to the June 2012 quarter, transport prices increased 0.9 percent. Second-hand cars (up 5.3 percent) had the most influence. 

 Graph, Transport group and selected classes, Quarterly indexes, June 2008 quarter to June 2012 quarter.  

Lower communication prices reflect cheaper Internet and cellphone service charges

Communication prices fell 2.5 percent in the June 2012 quarter. This follows falls of 0.2 percent in the March 2012 quarter and 3.6 percent in the December 2011 quarter.

Lower prices for telecommunication services (down 2.5 percent) provided the key contribution. This fall reflects increased data caps for broadband plans, and better-value cellphone services. 

Telecommunication equipment prices also fell in the June 2012 quarter (down 3.8 percent).

Annual prices

For the year to the June 2012 quarter, prices for the communication group decreased 9.5 percent. Telecommunication services (down 9.1 percent) was the key contributor. Telecommunication equipment prices (down 28 percent) also decreased.

Graph, Communication group and selected indexes, Quarterly indexes, June 2008 quarter to June 2012 quarter.

Summary of other group movements in the CPI

In the June 2012 quarter, these other groups rose: 

  • alcoholic beverages and tobacco (up 0.7 percent) 
  • miscellaneous goods and services (up 0.7 percent) 
  • health (up 0.4 percent) 
  • food (up 0.1 percent)
  • clothing and footwear (up 0.2 percent) 
  • education (up 0.1 percent).

Combined, these groups contributed 1.74 index points to the overall CPI rise of 3.75 index points.

The household contents and services group showed no change in the latest quarter.

The recreation and culture group fell (down 0.3 percent), contributing -0.25 of an index point to the overall CPI rise of 3.75 index points.

The rise in alcoholic beverages and tobacco prices was influenced by higher beer prices (up 2.7 percent). This is the largest rise since a 3.2 percent increase in the September 2009 quarter, and unusually, it occurred outside the normal, excise-increase-related September quarter. On an annual basis, alcoholic beverage and tobacco prices increased 6.2 percent, due mainly to higher prices for cigarettes and tobacco (up 13 percent due to the March quarter increase in excise tax).

Within the miscellaneous goods and services group, credit service prices rose (up 3.1 percent). The rise partly reflected the introduction of a student loan administration fee on 1 April 2012. Health insurance prices (up 3.4 percent) also rose.

The fall in recreation and culture prices reflected lower prices for audio-visual equipment (down 3.6 percent) and seasonally lower prices for domestic accommodation services (down 3.4 percent). The falls were partly offset by a rise in overseas package holiday prices (up 2.8 percent). On an annual basis, the recreation and culture group decreased (down 3.2 percent), largely influenced by cheaper prices for audio-visual equipment (down 19 percent). 
 

Graph, CPI and selected indexes, Quarterly indexes, June 2008 quarter to June 2012 quarter.  

CPI analytical series

In the June 2012 quarter, the tradable component of the CPI rose 0.1 percent and the non-tradable component of the CPI rose 0.5 percent.

The tradable component was influenced by seasonally higher prices for vegetables. International air fares, package holidays, and petrol prices also rose. The main individual downward contribution to the tradable component came from lower dairy product prices. Fruit and audio-visual equipment prices also fell.

The rise in the non-tradable component was mainly influenced by increased electricity prices. Beer, rentals for housing, and purchase of housing prices also rose. The main individual downward contribution to the non-tradable component came from lower prices for telecommunication services.

For the year to the June 2012 quarter, the tradable component decreased 1.1 percent, reflecting price falls for audio-visual equipment and vegetables. This is the largest annual decrease in tradables since a 2.3 percent fall in the year to the March 2004 quarter. Prices for the non-tradables component increased 2.4 percent, reflecting price rises for cigarettes and tobacco, rentals for housing, and electricity.

  Graph, Consumers price index, Tradables, non-tradables, and all groups — quarterly indexes, June 2008 quarter to June 2012 quarter.

In the June 2012 quarter, the  trimmed mean measures – which exclude extreme price rises and falls – recorded quarterly rises of 0.2 percent for the lowest trim of 5 percent through to 0.3 percent for the highest trim of 30 percent.

For the June 2012 quarter, the annual trimmed mean measures based on June 2011 quarter weights recorded increases of between 1.1 percent and 1.5 percent. These are above the annual increase in the all groups CPI.

Graph, Trimmed means and all groups, Percentage changes, June 2012 quarter.

Impact of items that rose and fell in price

The graph below shows the impact of items that rose and fell in price. Comparing the June 2012 quarter with the March 2012 quarter, the impact of the items that rose is slightly smaller, and the impact of items that fell is the same. This led to a 0.3 percent increase for the June 2012 quarter CPI, following a 0.5 percent increase in the March 2012 quarter.

 Graph, Index points contribution to consumers price index, June 2009 quarter to June 2012 quarter.

The following table outlines the distribution of price movements in the March 2012 and June 2012 quarters. The CPI is partitioned into national item-level indexes that increased, showed no change, or decreased.

Distribution of item-level index movements
National item-level index movements Dec 2011
qtr to Mar 2012 qtr
Mar 2012
qtr to Jun 2012 qtr
Increase in price
Number of items
Percentage of all items
Percentage of expenditure weight
Index points contribution
Percentage point contribution
Weighted average price increase (%)
365
51.4
65.7
14.9
1.3
2.0
364
51.3
59.4
12.9
1.1
1.9
No change in price
Number of items
Percentage of all items
Percentage of expenditure weight
101
14.2
10.1
101
14.2
11.0
Decrease in price
Number of items
Percentage of all items
Percentage of expenditure weight
Index points contribution
Percentage point contribution
Weighted average price decrease (%)
244
34.4
24.2
-9.2
-0.8
3.3
245
34.5
29.6
-9.2
-0.8
2.7

CPI revision advisory committee in 2013 – let us know your topics

Statistics NZ plans to convene a CPI revision advisory committee. This committee will meet in March or April 2013 to undertake an independent review of the methods and practices used to compile the CPI, and to advise the Government Statistician on the CPI. We will seek nominations for committee members from CPI customers.

Please let us know the topics you would like the 2013 CPI revision advisory committee to consider. You can email your suggestions to: cpireview@stats.govt.nz, or ring Peter Campion.

Background and discussion papers prepared by Statistics NZ for the committee will be available to the public on the Statistics NZ website. We will call for public submissions before the committee meeting.

The last CPI revision advisory committee was held in June 2004, with its recommendations informing the 2006 CPI review. For the papers prepared for the committee and the committee’s report (including 20 recommendations), see 2004 CPI Revision Advisory Committee.

For more information on the 2013 CPI revision advisory committee, please contact:

Peter Campion
Wellington 04 931 4600
Email: info@stats.govt.nz

CPI rolling review of retail outlets

Statistics NZ has begun a continuing, rolling review of retail outlets visited for the CPI. These retail outlets are those from which prices are collected by Statistics NZ price collectors. See CPI rolling review of retail outlets under the Data quality section of this release for further details. 

For more detailed data from the CPI, see the Excel tables in the 'Downloads' box.

Readers should note that from this release, CPI table formatting is updated.

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