Producer prices fall in Q3, led by electricity, dairy products

Free audio stream, including stories that are padlocked on our site. Listen on any device, anywhere. Updated twice daily. The audio stream takes several seconds to start on Android devices.

Launch Radio player

New Zealand producer input and output prices fell last quarter, led by electricity and dairy products, confirming there is still little sign of inflation pressures in the economy.

Producer input prices, or prices paid by producers, fell 1%, the first quarterly decline since the third quarter of 2009, after a 0.6% gain three months earlier, Statistics New Zealand says.

Output prices, or prices received by producers, fell 0.9%, the biggest drop since the third quarter of 2009, after gaining 0.3% in the second quarter.

The government statistician already released inflation data for the third quarter last month, showing the consumer price index rose a less-than-expected 0.3%, for an annual pace of 0.8%, below the central bank's 1% to 3% percent target band.

"Compared to the CPI, the PPI is more heavily weighted towards exported and imported items, so to a large degree the price drops in Q3 reflect global forces that were already known," Michael Gordon, senior economist at Westpac Banking Corp, says.

Electricity and gas input prices tumbled 15% in the latest quarter, mainly reflecting weaker power prices after higher hydro-storage lake levels and spot market conditions, the government statistician says.

Input prices for petroleum and coal manufacturers fell 9.3%, reflecting lower prices for imported crude oil.

Those for dairy manufacturers slid 6.8%, reflecting Fonterra's milk forecast payouts for the 2012-13 season.

Output prices for electricity and gas supply dropped 11.5%, mainly because of lower generation prices  – the biggest quarterly decline since December 2008. Output prices for dairy manufacturing fell 10% on lower prices for whole and skim milk powder.

Dairy cattle farming fell 9.4%, reflecting lower farm-gate milk prices.


This article is tagged with the following keywords. Find out more about MyNBR Tags

Comments & Questions

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot


Sym Price Change
USD 0.7562 -0.0025 -0.33%
AUD 0.9753 0.0064 0.66%
EUR 0.6945 -0.0027 -0.39%
GBP 0.5084 -0.0027 -0.53%
HKD 5.8650 -0.0191 -0.32%
JPY 90.0730 -0.3640 -0.40%


Commodity Price Change Time
Gold Index 1198.2 -6.590 2015-03-27T00:
Oil Brent 59.2 0.230 2015-03-26T00:
Oil Nymex 51.4 2.240 2015-03-26T00:
Silver Index 17.1 0.140 2015-03-26T00:


Symbol Open High Last %
NZX 50 5833.2 5854.2 5833.2 0.36%
NASDAQ 4863.7 4899.3 4863.4 0.57%
DAX 11920.2 11954.1 11843.7 0.21%
DJI 17673.6 17729.1 17678.2 0.19%
FTSE 6895.3 6910.6 6895.3 -0.58%
HKSE 24541.4 24549.9 24497.1 -0.04%
NI225 19374.7 19590.0 19471.1 -0.95%