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Consumers Price Index: September 2015 quarter
Embargoed until 10:45am  –  16 October 2015
Commentary

Quarterly rise of 0.3 percent on seasonally higher vegetable prices

See 'Downloads' box for a one-page detailed summary of this quarter's CPI (PDF). 

The consumers price index (CPI) rose 0.3 percent in the September 2015 quarter, following a 0.4 percent rise in the June 2015 quarter and a 0.2 percent fall in the March 2015 quarter (as corrected on 8 September 2015). Higher housing-related prices, and seasonally higher vegetable and package holiday prices, were partly countered by lower vehicle relicensing fees. After adjusting for seasonal effects, the CPI rose 0.1 percent.

Vegetable prices made the largest upward contribution (up 14 percent), influenced by seasonally higher prices for tomatoes and lettuce. After seasonal adjustment, vegetable prices fell 1.7 percent.

Local authority rates rose 5.7 percent, compared with a 3.8 percent rise in the September 2014 quarter. The latest rise was influenced by larger than average increases in the main centres and is the largest movement since a 6.0 percent rise in the September 2007 quarter. Local authorities set their rates annually, and these are mainly shown in the September quarter CPI.  

Package holiday prices rose 7.5 percent, with higher accommodation prices influenced by the lower New Zealand dollar. After seasonal adjustment, package holiday prices increased 3.0 percent. 

Petrol prices rose 1.6 percent. The average price of a litre of 91 octane petrol in the September 2015 quarter was $1.98, compared with $1.95 and $1.79 in the June 2015 and the March 2015 quarters, respectively.

Purchase of newly built houses (excluding land) rose 1.4 percent nationally, with rises of 2.0 percent in Auckland and 1.0 percent in Canterbury. Auckland's rise follows a rise of 2.8 percent in the June 2015 quarter. Excluding Auckland, prices for newly built houses were up 1.0 percent.

Rentals for housing rose 0.6 percent, with Auckland up 0.8 percent and Canterbury up 0.4 percent.

Other private transport services (down 24 percent) made the most significant downward contribution. The fall was influenced by a decrease in vehicle relicensing fees from 1 July 2015, a result of changes to the way ACC calculates levies for light vehicles.

Milk, cheese, and egg prices fell 2.9 percent, with fresh milk prices down 3.5 percent.

Prices for medical services fell 2.6 percent, influenced by higher subsidies on GP visits for 6-to-12-year-olds from 1 July 2015.

Quarterly non-tradable inflation lowest since March 2001 quarter

Non-tradables showed no overall change – its smallest movement since a 0.1 percent fall in the March 2001 quarter. Higher housing-related prices, including local authority rates, purchase of new houses, and rentals were offset by lower prices for vehicle relicensing fees and GP visits for 6-to-12-year-olds. Excluding government charges and tobacco, non-tradables rose 0.5 percent in the September 2015 quarter.

Tradables rose 0.7 percent, with higher prices for vegetables, package holidays, and petrol partly offset by lower prices for milk, cheese, and eggs. Furniture, furnishings, and floor coverings prices also rose, influenced by less discounting this quarter.

Annual inflation at 0.4 percent influenced by housing-related prices

In the year to the September 2015 quarter, the CPI increased 0.4 percent. This follows a 0.4 percent increase in the year to the June 2015 quarter.

Annual non-tradable inflation was 1.5 percent. This is the smallest annual increase in non-tradables since the December 2001 quarter when it also increased 1.5 percent. Purchase of newly built houses excluding land (up 5.5 percent nationally and 8.5 percent in Auckland), rentals for housing (up 2.3 percent), and local authority rates (up 5.9 percent) all rose in the year to the September 2015 quarter.

Cigarettes and tobacco (up 13 percent) made a significant upward contribution to the latest annual increase, influenced by the excise duty rise in January 2015. The main downward contribution came from lower prices for other private transport services (down 24 percent) and telecommunication services (down 4.2 percent).

Non-tradables excluding government charges and tobacco rose 1.6 percent in the year to the September 2015 quarter, compared with 1.5 percent in the years to both the June 2015 and March 2015 quarters.

The tradable component decreased 1.2 percent in the year. Lower prices for petrol (down 6.8 percent), milk, cheese, and eggs (down 5.7 percent), and international air fares (down 6.5 percent) made the main downward contributions. The main upward contributions came from higher prices for fruit, package holidays, and furniture and furnishings.

See CPI visualisation – an interactive tool to help you explore the changes in the prices and relative importance of the goods and services in the CPI basket.

See CPI tradables and non-tradables visualisation tool for further information.

CPI analytical series

The CPI excluding petrol increased 0.8 percent in the year to the September 2015 quarter, while the CPI excluding cigarettes and tobacco increased 0.1 percent. Excluding central and local government charges, the CPI rose 0.6 percent in the year to the September 2015 quarter.

The trimmed mean measures – which exclude extreme price rises and falls – had quarterly changes ranging from 0.4 percent to 0.5 percent in the September 2015 quarter. This indicates the ‘underlying’ price change (ie excluding extreme price rises and falls) was higher than the all groups movement.

Further information is included in table 13 of this release.

Graph, Percentage points contribution to CPI, September 2012 quarter to September 2015 quarter.

 

For more detailed data on the CPI see the Excel tables in the ‘Downloads’ box.

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