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Business Price Indexes: March 2016 quarter
Embargoed until 10:45am  –  18 May 2016
Commentary

Overview of price movements

Producer prices fell in the March 2016 quarter, mainly influenced by fuel and dairy prices. Output prices fell 0.2 percent, and input prices fell 1.0 percent. Output prices measure how much producers receive for the goods and services they produce. Input prices measure how much producers pay for the goods and services they use.

The farm expenses price index fell 0.3 percent, influenced by lower fuel prices. In contrast the capital goods price index rose 0.5 percent in the March 2016 quarter, influenced by higher prices of purchasing and construction of new residential buildings.

Price falls in petrol made the largest downward influence on the consumers price index (CPI) in the March 2016 quarter. The CPI rose 0.2 percent overall, while the CPI excluding petrol rose 0.5 percent in the March 2016 quarter.

Fuel prices keep producer prices down

Petrol and diesel continued to fall in price. Since the June 2012 quarter, the input prices for the petroleum and coal manufacturing industry have fallen by more than half.

In the March 2016 quarter, petroleum and coal manufacturing output prices (down 18 percent), and input prices (down 22 percent) fell. These indexes were influenced by lower crude oil, petrol, and diesel prices. 

 

 

According to the overseas trade price indexes (OTI) for the December 2015 quarter, import prices for fuels and lubricants (primary) fell by more than 25 percent, due to lower crude oil prices. 

See Business Price Indexes: March 2016 quarter – media release for further information on fuel and its impact.

Farming output prices fall

Sheep, beef, and grain farmers' output prices fell 8.7 percent in the March 2016 quarter. The output prices for meat and meat product manufacturing fell 4.6 percent. For the December 2015 quarter, the OTI meat exports fell from an all-time high in the September 2015 quarter. 

Dairy cattle farmers' output prices fell 6.0 percent. This was influenced by a further fall in the farm-gate milk price, reflecting difficult conditions in the globally traded dairy market.

The global dairy trade price index (traded in US dollars), fell throughout the January and February months of 2016. The start of the March month was the only rise for the quarter. From April 2016, global dairy prices have had some rises.

Although dairy cattle farmers' output prices fell, output prices for dairy product manufacturing rose 3.4 percent, recovering from last quarter's low.

  

 

Prices for telecommunication services up

Telecommunication, internet, and library services outputs rose 3.4 percent, and inputs rose 3.2 percent.

In December 2015, the Commerce Commission ruled the new maximum wholesale broadband prices. Following this, both output prices and input prices for telecommunication, internet, and library services were influenced in the March 2016 quarter.

See Commission releases final decision on wholesale broadband for more information on the decision.

 

Exchange rates

See Business Price Indexes: March 2016 – DataInfo+ for information on exchange rates.

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

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