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Consumers Price Index: March 2013 quarter
Embargoed until 10:45am  –  17 April 2013
Commentary

CPI rises 0.4 percent in March 2013 quarter

The consumers price index (CPI) rose 0.4 percent in the March 2013 quarter. This follows a fall of 0.2 percent in the December 2012 quarter and a rise of 0.3 percent in the September 2012 quarter.

Six groups increased in price in the March 2013 quarter. The alcoholic beverages and tobacco group (up 4.4 percent) made the main upward contribution. Higher prices were also recorded for the housing and household utilities (up 0.6 percent) and food (up 0.7 percent) groups.

The key individual upward contribution came from higher prices for cigarettes and tobacco (up 12 percent). Higher prices were also recorded for petrol (up 1.5 percent), rentals for housing (up 0.7 percent), and pharmaceutical products (up 9.3 percent).

Five groups decreased in price. The largest group contribution came from recreation and culture (down 1.6 percent).

The most significant individual downward contributions came from seasonally lower prices for international air fares (down 9.9 percent) and package holidays (down 10 percent). Lower prices were also recorded for vegetables (down 5.4 percent).

 

 Graph, Index points contribution to consumers price index, March 2013 quarter.

CPI shows 0.9 percent annual increase 

The CPI increased 0.9 percent in the year to the March 2013 quarter, following increases of 0.9 percent and 0.8 percent in the years to the December 2012 and September 2012 quarters, respectively.

Six of the 11 groups in the CPI made upward contributions in the year to the March 2013 quarter.

By group, the main upward contribution came from housing and household utilities (up 2.9 percent). Higher prices were also recorded for:

  • alcoholic beverages and tobacco (up 5.0 percent)
  • health (up 3.7 percent)
  • miscellaneous goods and services (up 2.4 percent). 

By group, the main downward contributions came from:

  • communication (down 7.2 percent)
  • recreation and culture (down 1.5 percent)
  • transport (down 0.4 percent)
  • household contents and services (down 2.6 percent).

Individually, the main upward contribution came from higher prices for cigarettes and tobacco (up 12 percent). Higher prices were also recorded for:

  • electricity (up 5.2 percent)
  • rentals for housing (up 2.2 percent)
  • purchase of newly built houses (up 3.3 percent)
  • local authority rates (up 4.3 percent).

The main individual downward contributions came from lower prices for:

  • telecommunication services (down 7.2 percent)
  • audio-visual and computing equipment (down 12 percent)
  • domestic air fares (down 9.9 percent)
  • fresh milk (down 7.7 percent).

Alcoholic beverage and tobacco prices rise

Alcoholic beverage and tobacco prices rose 4.4 percent in the March 2013 quarter, following a 0.4 percent fall in the December 2012 quarter and a 0.3 percent rise in the September 2012 quarter.

Cigarette and tobacco prices (up 12 percent) made the most significant upward contribution to the March 2013 quarter. The annual adjustment to the excise duty on cigarettes and tobacco occurred on 1 January 2013. The excise duty rose 10.86 percent. The increase was based on a 0.86 percent rise in the 'CPI less credit services' index between the September 2011 and September 2012 quarter. The 1 January rise also included a fourth successive 10 percent increase – as set out in the Excise and Excise-equivalent Duties Table (Tobacco Products) Amendment Order 2012.

Alcoholic beverage prices also rose in the March 2013 quarter, by 0.8 percent. This was influenced by higher prices for wine (up 1.9 percent) and beer (up 0.6 percent).

Annual prices

The alcoholic beverages and tobacco group increased 5.0 percent from the March 2012 quarter to the March 2013 quarter. The most significant increase came from cigarettes and tobacco (up 12 percent). This increase was influenced by the rise in excise duty of cigarettes and tobacco on 1 January 2013.  

Graph, Alcoholic beverages and tobacco group and selected indexes, quarterly indexes, base: June 2006 quarter (=1000), March 2009 quarter to March 2013 quarter.

Housing and household utilities up 0.6 percent

The housing and household utilities group rose 0.6 percent in the March 2013 quarter, following rises of 0.6 and 0.8 percent in the December and September 2012 quarters, respectively.

Higher prices for rentals for housing (up 0.7 percent) made the most significant upward contribution, influenced by a rise in Canterbury (up 2.1 percent).

Other key upward contributions came from:

  • the purchase of newly built houses (up 0.9 percent), reflecting an increase in Canterbury (up 3.3 percent)
  • property maintenance services (up 1.1 percent).

Annual prices 

In the year to the March 2013 quarter, the housing and household utilities group increased 2.9 percent. The key contributions were:

  • electricity (up 5.2 percent)
  • rentals for housing (up 2.2 percent), influenced by rises in Canterbury (up 3.7 percent) and Auckland (up 2.7 percent)
  • purchase of newly built houses (up 3.3 percent), reflecting an increase in Canterbury (up 12 percent) 
  • local authority rates (up 4.3 percent).

Graph, Housing and household utilities group and selected classes, quarterly indexes, base: June 2006 quarter (=1000), March 2009 quarter to March 2013 quarter.  

Recreation and culture falls 1.6 percent for the quarter

The recreation and culture group fell 1.6 percent in the March 2013 quarter. The main individual downward contribution came from seasonally lower package holidays (down 10 percent).

Prices for books (down 11 percent, following a 9.4 percent rise in the December quarter) and audio-visual equipment (down 4.4 percent) also fell.

Annual prices

In the year to the March 2013 quarter, the recreation and culture group decreased 1.5 percent. The main individual downward contribution came from audio-visual and computing equipment (down 12 percent). 

 Graph, Recreation and culture group and selected classes, quarterly indexes, base: June 2006 quarter (=1000), March 2009 quarter to March 2013 quarter.

Summary of other group movements in the CPI

In the March 2013 quarter, the following groups increased:

  • food (up 0.7 percent)
  • health (up 1.2 percent)
  • education (up 3.5 percent)
  • miscellaneous goods and services (up 0.5 percent).

Combined, these groups contributed 3.58 index points to the overall CPI increase of 4.93 index points.

In the March 2013 quarter, the following groups decreased:

  • transport (down 0.4 percent)
  • household contents and services (down 1.2 percent)
  • communication (down 1.3 percent)
  • clothing and footwear (down 0.9 percent).

Combined, these groups contributed -2.34 index points to the overall CPI increase of 4.93 index points.

Within the food group, the most significant upward contribution came from higher prices for the grocery food subgroup (up 1.4 percent). This rise reflected higher prices for bread and cereals (up 2.6 percent). Higher prices were also recorded for fruit (up 4.9 percent).

The increase in the health group came from higher prices for pharmaceutical products (up 9.3 percent), reflecting an increase in prescription charges. The increase in prescription charges came into effect on 1 January 2013. These charges are paid for prescription medicines and oral contraceptives. From 1 January 2013, prescription charges increased from $3 to $5 per item for fully subsidised medicines, apart from children under six whose prescriptions remain free.

The rise in the education group reflected increases in primary and secondary education (up 4.7 percent), and in tertiary and other post-school education prices (up 3.8 percent). These prices are collected in only the March quarter of each year.

The household contents and services group decreased due to lower prices for furniture and furnishings (down 2.9 percent). Lower prices were also recorded for household textiles (down 5.1 percent) and major household appliances (down 0.9 percent). These were influenced by an increase in the level of discounting.

The decrease in the transport group reflected seasonally lower prices for international air fares (down 9.9 percent). This was partly countered by higher prices for petrol (up 1.5 percent) and second-hand cars (up 1.8 percent).

Within the communication group, the most significant downward contribution came from lower prices for telecommunication services (down 1.4 percent). This fall reflected better-value cellphone services and Internet services.

Annual prices

In the year to the March 2013 quarter, prices increased for:

  • fruit and vegetables (up 5.3 percent)
  • insurance (up 4.2 percent)
  • medical services (up 3.4 percent)
  • pharmaceutical products (up 11 percent).

The main downward contribution for the year to the March 2013 quarter came from telecommunication services (down 7.2 percent). This fall reflected better-value cellphone services and Internet services. Lower prices were also recorded for domestic air fares (down 9.9 percent) and fresh milk (down 7.7 percent).  
 

Graph, CPI and selected indexes, quarterly indexes, base: June 2006 quarter (=1000), March 2009 quarter to March 2013 quarter.  

CPI analytical series

In the March 2013 quarter, the tradable component of the CPI fell 0.5 percent and the non-tradable component of the CPI rose 1.1 percent.

The tradable component was mainly influenced by seasonally lower prices for international air fares and package holidays. Lower prices were also recorded for vegetables, books, and furniture and furnishings.

The main upward contribution to the tradable component came from higher prices for petrol. Higher prices were also recorded for fruit and second-hand cars.

The rise in the non-tradable component was mainly influenced by increases in cigarette and tobacco prices. Higher prices were also recorded for rentals for housing and prescription medicines.

Lower prices for telecommunication services were the main downward contributor for the non-tradable component.

Annual

For the year to the March 2013 quarter, the tradable component decreased 1.1 percent. The main downward movement came from audio-visual and computing equipment. Other decreases came from dairy products, second-hand cars, and furniture and furnishings. Higher prices were recorded for fruit and vegetables and for international air fares.

Prices for the non-tradable component increased 2.4 percent, reflecting higher prices for cigarettes and tobacco, electricity, and rentals for housing. Higher prices were also recorded for the purchase of newly built houses and local authority rates. The main downward contributor came from telecommunication services. Lower prices were also recorded for domestic air fares.

  Graph, Consumers price index, tradables, non-tradables, and all groups – quarterly indexes, base: June 2006 quarter (=1000), March 2009 quarter to March 2013 quarter.

In the March 2013 quarter, the  trimmed mean measures – which exclude extreme price rises and falls – recorded quarterly rises ranging from 0.4 percent to 0.5 percent. This indicates the underlying price change was the same or slightly above the rise in the all groups CPI.

For the March 2013 quarter, the annual trimmed mean measures showed increases of between 0.9 percent and 1.2 percent. This indicates the underlying price change for the year was the same or above the annual rise in the all groups CPI.

 

 Graph, Trimmed means and all groups, percentage changes, March 2013 quarter.

Impact of items that rose and fell in price

The graph below shows the impact of the items that rose and fell in price. Comparing the March 2013 quarter with the December 2012 quarter, the impact of the items that rose in price is larger, and the impact of items that fell in price is smaller. This led to a 0.4 percent rise for the March 2013 quarter CPI, following a 0.2 percent fall in the December 2012 quarter.

 Graph, Index points contribution to consumers price index, March 2010 quarter to March 2013 quarter.

Further information is now included in table 13 of the release.

We are seeking feedback on the CPI

We are convening a CPI advisory committee in May to undertake an independent review of the concepts, methods, and practices used to compile the CPI, and to advise the Government Statistician on the CPI.

We have prepared a discussion paper and a background paper for the committee and the wider CPI user community. These papers will help to inform the topics the committee will consider.

See CPI Advisory Committee 2013 to read the papers.

We invite you to make a submission on the topics in the papers, and other topics concerning the CPI. We are also happy to meet with you if you would like to discuss a topic, or a potential submission. The committee will consider submissions when it meets in May.

Submissions close on 24 April 2013.

You can email your submission to cpireview@stats.govt.nz, or ring Peter Campion on 04 931 4600 or 0508 525 525.

Following the meeting, we will publish a report from the committee (including its recommendations) in July 2013.

The committee’s recommendations will inform the next three-yearly CPI review, which will be implemented when the September 2014 quarter CPI is released in October 2014.

CPI rolling review of retail outlets

We are continuing our ongoing rolling review of the retail outlets we collect prices from for the CPI. The third group of changes were implemented in this release. See CPI rolling review of retail outlets in the Data quality section of this release for further details. 

New CPI series available from the March 2013 quarter

From the March 2013 quarter and onwards, the following additional series will be available from Infoshare:

  • All groups less rentals for housing subgroup (series identifier: CPIQ.SE9NS1500)
  • All groups less food group, household energy subgroup, vehicle fuels, and government charges (series identifier: CPIQ.SE9NS1510)
  • All groups tradables less food group (series identifier: CPIQ.SE9NS6020)
  • All groups tradables less food group and vehicle fuels (series identifier: CPIQ.SE9NS6030)
  • All groups non-tradables less rentals for housing, home ownership, and property maintenance subgroups (series identifier: CPIQ.SE9NS6530) 

These series go back to either the June 1999 quarter or the June 2006 quarter.

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

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