Consumers Price Index: September 2009 quarter

Consumers price index quarterly movement

The consumers price index (CPI) recorded an increase of 1.3 percent in the September 2009 quarter, following increases of 0.6 percent and 0.3 percent in the June 2009 and March 2009 quarters, respectively, and a decrease of 0.5 percent in the December 2008 quarter.

Seven groups increased, with transport (up 3.1 percent), food (up 1.7 percent), and housing and household utilities (up 0.7 percent) making the most significant contributions. Other upward contributions came from alcoholic beverages and tobacco (up 1.5 percent), recreation and culture (up 0.9 percent), health (up 1.4 percent), and miscellaneous goods and services (up 0.7 percent).

Three groups recorded decreases: household contents and services (down 0.3 percent), communication (down 0.2 percent), and clothing and footwear (down 0.1 percent), while the education group remained unchanged.

The most significant individual upward contributions came from higher prices for international air transport (up 11.0 percent), local authority rates and payments (up 5.6 percent), and vehicle relicensing fees (up 16.2 percent).

^{Note: Points contribution may not sum to total due to rounding.}

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Distribution of item-level movements

The table below outlines the distribution of price movements in the June 2009 and September 2009 quarters. The CPI has been partitioned into those national item-level indexes that increased, showed no change, or decreased.

The distribution of item-level movements shows that in the September 2009 quarter:

• the percentage of expenditure weight of items that increased in price fell slightly, while the percentage of expenditure weight of items that decreased in price has risen.
• the weighted average price increase rose slightly, while the weighted average price decrease fell significantly.
• the weighted average price increase is now greater than the weighted average price decrease.

This resulted in an increase of 1.3 percent in the CPI for the September 2009 quarter, following an increase of 0.6 percent in the June 2009 quarter.

CPI annual movement

The CPI increased 1.7 percent in the year from the September 2008 quarter to the September 2009 quarter, following increases of 1.9 percent and 3.0 percent for the years to the June 2009 and March 2009 quarters, respectively.

The last time the CPI recorded a lower annual increase was in the year to the March 2004 quarter.

Nine of the 11 groups in the CPI made upward contributions to the increase in the year to the September 2009 quarter. The most significant upward contributions came from the food (up 5.4 percent), and housing and household utilities (up 2.1 percent) groups.

Transport (down 5.5 percent) was the only group to decrease, while the communication group was unchanged.

The most significant individual upward contributions came from higher prices for the purchase of second-hand cars (up 12.9 percent), electricity (up 4.5 percent), and local authority rates and payments (up 6.6 percent).

The most significant individual downward contributions came from lower prices for petrol (down 19.0 percent), international air transport (down 15.1 percent), diesel (down 38.8 percent), and overseas package holidays (down 11.9 percent).

CPI all groups and tradable and non-tradable component series

In the September 2009 quarter, the tradable component increased 1.6 percent, following an increase of 0.8 percent in the June 2009 quarter. The most significant upward contributions to the tradable component came from vegetables, international air transport, and petrol.

The tradable component fell 0.1 percent for the year to the September 2009 quarter. The most significant downward contribution to the tradable component came from petrol. If petrol prices had remained constant from the September 2008 quarter to the September 2009 quarter, the tradable component would have increased 2.3 percent.

The non-tradable component increased 1.0 percent in the September 2009 quarter, following an increase of 0.5 percent in the June 2009 quarter. The most significant upward contributions came from local authority rates and payments, vehicle relicensing fees, and beer.

For the year to the September 2009 quarter, the non-tradable component increased 3.0 percent. Significant upward contributions came from electricity, local authority rates and payments, and beer. The 3.0 percent annual increase in the non-tradable component is the lowest since the year to the March 2002 quarter.

 

 

Transport

Prices for the transport group increased 3.1 percent in the September 2009 quarter, following an increase of 0.6 percent in the June 2009 quarter and a decrease of 1.5 percent in the March 2009 quarter.

The most significant individual upward contributions came from higher prices for international air transport (up 11.0 percent), vehicle relicensing fees (up 16.2 percent), petrol (up 2.1 percent), and the purchase of second-hand cars (up 3.1 percent). The increase in international air transport follows two quarters of double-digit decreases, which culminated in the index reaching its lowest level since the June 1981 quarter. Vehicle relicensing fees reflects an increase in Accident Compensation Corporation (ACC) levies on 1 July 2009.

The transport group decreased 5.5 percent from the September 2008 quarter to the September 2009 quarter. The most significant individual downward contributions came from lower prices for petrol (down 19.0 percent), international air transport (down 15.1 percent), and diesel (down 38.8 percent). The 19.0 percent annual decrease in petrol prices, which is the largest fall since the series began in the March 1981 quarter, included a 22.4 percent decrease in the December 2008 quarter. Petrol and diesel pump prices peaked in early July 2008 and fell steadily over the following months.

If petrol and diesel prices had remained constant from the September 2008 quarter to the September 2009 quarter, the CPI would have increased 2.9 percent.

 

Food

Food prices rose 1.7 percent in the September 2009 quarter, following rises of 0.9 percent and 1.2 percent in the June 2009 and March 2009 quarters, respectively.

All of the food subgroups made upward contributions, with higher prices for fruit and vegetables (up 6.6 percent), grocery food (up 0.6 percent), non-alcoholic beverages (up 2.2 percent), meat, poultry, and fish (up 1.0 percent), and restaurant meals and ready-to-eat food (up 0.8 percent).

Higher prices for vegetables (up 13.9 percent) accounted for two-thirds of the increase in food prices, with lettuce prices rising 80.5 percent. According to the food price index, vegetable prices rose strongly in the June 2009 month, again in July, and subsequently fell strongly in August 2009 and September 2009.

The food group increased 5.4 percent from the September 2008 quarter to the September 2009 quarter, accounting for three-fifths of the annual increase in the CPI. All five of the food subgroups increased in price, with the most significant contributions coming from grocery food (up 5.3 percent) and meat, poultry, and fish (up 9.6 percent).

 

Housing and household utilities

The housing and household utilities group increased 0.7 percent in the September 2009 quarter, following increases of 0.4 percent and 0.3 percent in the June 2009 and March 2009 quarters, respectively.

The most significant contribution came from local authority rates and payments (up 5.6 percent). Local authorities usually determine their rates annually, and these normally come into effect from 1 July. The movement in local authority rates and payments in the September 2009 quarter reflects approximately 90 percent of the weight in the sample, with the remainder expected to be included in the December 2009 quarter CPI. Price movements relating to 81 percent and 82 percent of the weight of the sample were included in the September 2008 and September 2007 quarters, respectively.

Prices for the purchase of new housing increased 0.1 percent in the September 2009 quarter, following an increase of 0.2 percent in the June 2009 quarter, and no change in the March 2009 quarter. Of the prices reported by respondents in the September 2009 quarter and after adjusting for quality change, 70 percent showed no change in price, 18 percent showed increases, and 12 percent showed decreases.

Prices for property maintenance services fell 0.7 percent, influenced by price subsidies available to households for the installation of insulation and clean heating under the Heat Smart initiative administered by the Energy Efficiency and Conservation Authority. As households receiving the price subsidies must go through approved Heat Smart service providers, and cannot purchase subsidised insulation or clean heating goods directly, this impact is being shown only in the property maintenance services class, which is included in the non-tradables component.

The housing and household utilities group increased 2.1 percent from the September 2008 quarter to the September 2009 quarter. This is the lowest annual increase since the year to the December 2001 quarter when it fell 1.0 percent.

The most significant upward contributions for the year to the September 2009 quarter came from higher prices for electricity (up 4.5 percent), local authority rates and payments (up 6.6 percent), and actual rentals for housing (up 1.1 percent). The purchase of new housing rose slightly, up 0.1 percent.

 

Other groups

In the September 2009 quarter, upward movements were recorded for the following groups: alcoholic beverages and tobacco (up 1.5 percent), recreation and culture (up 0.9 percent), health (up 1.4 percent), and miscellaneous goods and services (up 0.7 percent). Combined, these groups contributed 3.41 index points to the overall CPI movement.

The most significant upward contribution to the other groups came from higher prices for alcoholic beverages (up 2.5 percent). Alcoholic beverage prices were influenced by the annual indexation of alcohol excise, which rose 2.871 percent.

The education group remained unchanged overall during the September 2009 quarter.

In the September 2009 quarter, downward movements were recorded for household contents and services (down 0.3 percent), communication (down 0.2 percent), and clothing and footwear (down 0.1 percent). These groups contributed -0.26 index points to the overall CPI movement.

For technical information contact:
Cary Milkop or Daniel Griffiths
Wellington 04 931 4600
Email: info@stats.govt.nz

Next release ...

Consumers Price Index: December 2009 quarter will be released on 20 January 2010.