KEY POINTS:
Lower electricity generation and supply costs were the main driver behind falls for output and input prices in the Producers Price Index (PPI) for the December quarter.
Drops of 0.5 per cent in output prices and 0.3 per cent in input prices were the first quarterly falls since the March 2004 quarter, Statistics New Zealand (SNZ) said today.
The PPI measures the average level of industrial input prices (excluding labour) and output prices at the farm and factory gate.
The electricity generation and supply outputs index fell 5.8 per cent due to lower spot market prices and lower commercial electricity retail prices in the December 2006 quarter, the third consecutive fall for that index.
Another significant downward contributor to the PPI output index was the meat and meat product manufacturing index which fell 6.1 per cent due to lower export prices for lamb and beef.
The dairy product manufacturing outputs index was also down, dropping 4.6 per cent due to lower prices for cheese, SNZ said.
Rises in outputs prices included increases of 1 per cent in the construction index, 6.2 per cent in the horticulture and fruit growing index, and 3.5 per cent in the sheet and fabricated metal product manufacturing index.
For the PPI inputs index the main feature was an 11.4 per cent fall in the electricity generation and supply index due to higher lake levels and lower fuel costs.
Also significantly down was the gas supply inputs index, with a 6.9 per cent fall, and the air transportation index, down 3.9 per cent.
A 0.4 per cent rise in the construction index was the main upward contributor to input prices in the December quarter.
On an annual basis, the PPI outputs index rose 3.6 per cent in the year to December, while the inputs index rose 5.3 per cent.
