New Zealand manufacturers faced the slowest growth in input prices for almost two years in the third quarter as cheaper milk lowered dairy costs for manufacturers.
The Producer Price Index (PPI), which measures price changes for goods and services used by the productive sector, rose 0.6 per cent in thequarter to September 30, slowing from 0.9 per cent in the second quarter, according to Statistics New Zealand. It was the slowest rise since December 2009, when the index rose 0.4 per cent.
A 10.2 per cent fall in dairy input prices dampened the increase, led by a 19 per cent surge in electricity and gas input prices, the biggest quarterly rise since June 2008.
Output prices, which measure changes in the price of goods and services produced here, rose 0.2 per cent, the slowest pace since December.
A 12 per cent fall in cattle farming and 3.6 per cent for dairy product manufacturing held back output prices, the biggest upswings in electricity and gas supply which rose 13 per cent.
BNZ economist Doug Steel said the pace of producer price growth confirmed cooling inflation after government data showed softer consumer price inflation.
Annually, the PPI rose 4.7 per cent, while output prices increased 3.5 per cent.
