This section has information that has changed since the last release.
This section has information that does not generally change between releases.
Prices were collected throughout the period 1 July to 30 September 2012. Visits by Statistics NZ staff to retail outlets were made during 1–15 August in the 10 smallest consumers price index (CPI) regions and during 1–19 August for the five largest CPI regions. Prices for food and non-food groceries were collected each month, usually between the 8th and 16th of the month. Petrol, fresh fruit, and fresh vegetable prices were collected weekly. Quarterly postal survey prices were collected at 15 August.
Price changes may be influenced by one-off events. Factors that affected the September 2012 quarter CPI are listed below.
- Local authorities set their rates annually, and these are mainly shown in the September CPI quarter. The movement in local authority rates and payments in this quarter reflects 89 percent of the weight in the sample, with the remainder expected to be included in the December 2012 quarter.
- The annual indexation adjustment of the excise duty on alcoholic drinks occurred on 1 July 2012. The adjustment was a 1.48 percent increase in the excise duty, based on the movement in the 'CPI less credit services' index from the March 2011 quarter to the March 2012 quarter. The effect on retail prices should have been shown fully in the CPI for the September 2012 quarter, depending on the timing of price increases in pubs, clubs, restaurants, and liquor stores, and the timing of price collection by Statistics NZ staff.
- Road user charges for a private motor car, administered by the NZ Transport Agency, increased by 8.3 percent (or $3.69 per 1,000km) on 1 August 2012. Transaction fees associated with the purchase of road user charges fell and moderated this increase. The fuel excise duty on petrol increased by 2 cents per litre on 1 August 2012. Two-thirds of these price increases were shown in the September 2012 quarter CPI.
- Prices for new or additional class of driver licence fees, administered by the NZ Transport Agency, rose on 5 July 2012. These price increases were shown in the September 2012 quarter CPI.
Target: 93 percent
Achieved: 94.6 percent
Prices are collected directly from retail outlets by Statistics NZ price collectors.
About 120,000 prices were collected from about 3,000 retail outlets and 2,400 other businesses and landlords.
Due to unavailability at the time of price collection, on average 1–2 percent of prices (not including seasonal items such as winter clothing) are imputed each quarter. This is often done by carrying forward the previous quarter’s price. Other imputation is done by applying the movements of similar categories of items.
Review of the CPI
Reviews of the CPI are undertaken every three years. The latest review was implemented with the publication of the September 2011 quarter CPI. The review involved reselecting the basket of representative goods and services, updating the new national expenditure weights, and updating regional population weights.
See Consumers price index review: 2011 for more information.
Impact of GST rise on the CPI
GST rose from 12.5 percent to 15 percent on 1 October 2010. However, the rise in GST was not immediately reflected in the prices of some seasonally available goods and services in the CPI basket. The rise was reflected when prices for these items were next collected. These items make up about 3 percent of expenditure on goods and services in the CPI. Of this 3 percent, nearly half was reflected in the March 2011 quarter CPI, nearly half in the June 2011 quarter, and the remainder was shown in the September 2011 quarter.
The table below shows what the quarterly and annual percentage changes would have been if prices collected for the December 2010, and March, June, and September 2011 quarters had been processed with GST of 12.5 percent for goods and services that are subject to GST. The CPI would have risen 0.4 percent in the September 2011 quarter, and 2.5 percent for the year to the September 2011 quarter.
CPI processed with GST at 12.5 percent
Percentage change from previous quarter
Percentage change from same quarter of previous year
Adjusted index number
Care required when using the CPI to adjust monetary values
The CPI is used to adjust monetary values, such as those in legislation and contracts. Care is required when using the CPI to adjust monetary values during the year-long period in which the rise in GST is reflected in the CPI. Some goods and services in the CPI are not subject to GST, some are zero-rated for GST purposes (meaning the applicable rate of GST is zero), and the rise in GST was not immediately reflected for all goods and services in the CPI that are subject to GST.
Special care is required when the monetary values being adjusted exclude GST.
It would not be appropriate to adjust prices or monetary values that exclude GST (but which are subject to GST) by the CPI movement during the period in which the increase in GST is reflected in the CPI. This would mean that the GST increase is counted twice. Another common use of the CPI is to adjust housing rentals. Housing rentals are not subject to GST. Using the CPI to adjust rental values during the period in which the increase in GST is reflected in the CPI would mean that the adjustments would include the overall impact of the GST increase on the CPI.
The reference population of the CPI covers approximately 98 percent of the usually-resident New Zealand population living in permanent dwellings.
Expenditure weights give the relative importance of the goods and services in the CPI basket.
The CPI represents about $88.9 billion spent on goods and services by New Zealand households, at June 2011 quarter prices. Information on spending is sourced from the Household Economic Survey and other sources.
New Zealand households spent $83.9 billion on goods and services in the year to June 2010 (which is the latest period available). Once the effect of price change between the year to June 2010 and the June 2011 quarter is taken into account (called ‘price updating’), spending on household goods and services measured in the CPI rises to $88.9 billion.
The relative importance of the CPI subgroups shows that about $23.55 of every $100 spent by households on goods and services covered by the CPI is spent on housing and household utilities. About $18.79 is spent on food and about $15.12 is spent on transport. More information on the relative importance of CPI groups, subgroups, and classes is given in table 9 of this release.
Prices used in the CPI are collected through three main methods: visiting retail outlets, postal surveys, and the Internet.
Statistics NZ price collectors personally visit over 3,000 different shops in 15 main centres throughout the country. The types of outlets visited include supermarkets, department stores, and appliance stores. Prices are collected weekly for motor fuels and for fresh fruit and vegetables; monthly for food, non-food groceries, alcoholic beverages, and newspapers; and quarterly for other goods and services.
Prices are surveyed in 15 urban areas: Whangarei, Auckland, Hamilton, Tauranga, Rotorua, Napier-Hastings, New Plymouth, Wanganui, Palmerston North, Wellington, Nelson, Christchurch, Timaru, Dunedin, and Invercargill.
In addition to prices obtained by price collectors, about 70 different postal surveys are sent out each month, quarter, or year. These surveys are used primarily to collect prices for services, such as electricity and bus fares. The surveys are sent directly to service providers. In some cases, for sampling and collection reasons, these prices are aggregated to the national level or to broad regions such as Auckland, Wellington, Canterbury, rest of North Island, and rest of South Island. Items where movements for five broad regions are used include: the purchase of second-hand cars; purchase of new housing; and rentals for housing. In these cases, price movements for the five broad regions are used for the corresponding 15 regions.
Postal surveys are sent to service providers who set prices nationally or with little variation according to location, such as prices for telephone homeline rental.
Prices for products and services (such as digital downloads, package holidays, and air fares) are also collected each month or quarter from the Internet.
Prices are collected weekly, monthly, quarterly, or annually, depending on the expected frequency of price changes exhibited by the goods or service.
Accuracy of the data
Elementary aggregate formula
Average prices in the CPI are called elementary aggregates. These elementary aggregates are the first level of the index aggregation. Regional elementary aggregates are calculated for each of the 15 pricing centres where price collection supports regional estimation. In other cases, regional elementary aggregates are calculated for five CPI broad regions (Auckland, Wellington, rest of North Island, Canterbury, rest of South Island) or, where prices do not support regional estimation, directly to a national elementary aggregate. Since the 2006 review of the CPI, the geometric mean, or Jevons, formula has been used to calculate the elementary aggregate indexes for items where outlet substitution is possible (eg for groceries and appliances).
The 'ratio of arithmetic mean prices', or Dutot, formula is used for items where outlet substitution is not possible (eg local authority rates), where prices are subsidised and may fall to zero (eg GPs' fees), for fresh fruit and vegetables (as the first stage of aggregation is across both outlets within each region, and across weeks within each month), and where it is not currently practical to adopt the Jevons formula (eg when prices are aggregated directly to a national elementary aggregate, rather than aggregated to a regional level).
For more information on the Jevons and Dutot formulae see 'Elementary aggregate formula' in Information about the Consumers Price Index.
Method of aggregating monthly collected prices from the monthly to the quarterly level
Prices are collected monthly for the food group and a number of non-food items in the CPI, including electricity, cigarettes and tobacco, alcoholic drinks, and air travel. These prices are averaged over the quarter for inclusion in the CPI.
The method for calculating these averages is to obtain monthly regional average prices for the item by outlet-weighting the prices collected at different outlets within each region. The monthly regional average prices are used to calculate quarterly regional average prices by weighting each monthly regional average price by the number of days in the month in which it was collected. This is called day weighting. All the regions are aggregated to obtain the national quarterly index by weighting together regional price movements from the base (ie June 2011) quarter to the current quarter, using the regional population weights.
Petrol and diesel prices are collected weekly, usually on Fridays. The CPI petrol price index measures price changes of 91 octane petrol and 95/98 octane petrol. Within each CPI region, an average price per 10 litres of each fuel is calculated from the prices surveyed each week from individual service stations. Monthly regional average prices for each fuel are then calculated as simple averages of the averages for the weeks within each month. Quarterly regional average prices for each fuel are then calculated as the day-weighted averages of the averages for the three months within the quarter. Regional price movements from the base (ie June 2011) quarter to the current quarter are then weighted by the regional population-weighted share of the national expenditure weight, to calculate the national petrol and diesel price indexes for the current quarter.
Since petrol and diesel prices are collected either 12 or 13 times within each quarter, a price change that occurs during the quarter is only partly reflected in that quarter, with the remainder being reflected in the following quarter. This is also the case for commodities that are priced monthly, such as cigarettes and tobacco.
Population weights are used to allocate the national expenditure weights of goods and services to the CPI pricing centres. For example, the population weights ensure that a price change in Auckland (which has 33.43 percent of the population weight) would have about three times the effect on the national CPI than the same price change in Wellington (which has 11.07 percent of the population weight).
The latest subnational population estimates, which are published annually, are used to calculate the population weights at each CPI review. Estimates at 30 June 2010 were the latest figures available at the time of the 2011 CPI review. This means that any potential population movements following the Christchurch earthquakes are not reflected in these weights. Population weights will be monitored, and if considered necessary, updated to maintain the accuracy of the CPI.
Statistics NZ publishes CPI price indexes for five broad regions based on regional council area boundaries. These indexes are available from Infoshare. These regions are Auckland, Wellington, rest of North Island, Canterbury, and rest of South Island.
For the population weights of each region in the CPI, see table 7 of this release.
Outlets are given appropriate weights to reflect their relative importance in terms of household spending.
'On special' prices
Items that are 'on special' are included in the CPI at the price levels observed at the time of price collection. Quantity specials (such as a 15-pack of beer at a cheaper shelf price than the 12-pack) are also taken into account where appropriate (as the price per bottle for the special is lower).
Standard and non-standard series
CPI series that contribute to the hierarchical structure of the overall CPI are known as standard series. For example, the clothing index, combined with the footwear index, contributes to the clothing and footwear index, which in turn contributes to the all groups index. Components of this pyramid-like structure are known as standard index series. In addition, a selection of non-standard series is published in the information release tables, and additional series can be accessed free of charge from the online Infoshare database. Examples of these non-standard series include:
- all groups CPI less each of the 11 CPI groups
- all groups CPI plus interest
The CPI is published at the following levels: group, subgroup, and class – all at the national level. Selected sections within the food group are also published.
Tradable and non-tradable non-standard series
The tradable and non-tradable component series that appear in table 1 allow users to decompose CPI goods and services into two components: one contains goods and services that are imported or in competition with foreign goods, either in domestic or foreign markets tradables); the other contains goods and services that do not face foreign competition (non-tradables).
Movements in the tradables component (tradable inflation) demonstrate how international price movements and exchange rates are affecting consumer prices. The non-tradables component shows how domestic demand and supply conditions are affecting consumer prices.
The June 2011 quarter expenditure weight of the tradables component is 44.01 percent, compared with 45.78 percent in 2008. The June 2011 quarter weight of non-tradables is 55.99 percent, compared with 54.22 percent in 2008.
The June 2011 quarter tradable/non-tradable weights for each group, subgroup, and class are included in table 5 of the Consumers price index review: 2011.
An information paper on the methodology used to categorise the tradable and non-tradable series, Consumers Price Index Tradable and Non-tradable Series, is available on the Statistics NZ website.
Trend measures of price-level change
Over the long term, the CPI captures the broad pattern of price change, but can be influenced by one-off events when analysing price change over shorter timeframes (such as a supply disturbance affecting petrol prices). To remove such influences, analytical measures of price change are calculated in an attempt to isolate the more persistent – or underlying – component of general price-level changes. Several analytical measures are constructed to give a good guide to underlying price-level change. These are a range of 'trimmed means' and a range of 'weighted percentiles' including a weighted median. Trimmed means and weighted percentiles are given in table 11 and table 12 of this release.
Trimmed means exclude the influence of the largest increases and decreases in the CPI. This is done at the item level of about 700 goods and services in the CPI basket (eg 91 octane petrol or strawberries). The trimmed means progressively remove the influence of the largest increases and decreases. Weighted percentiles highlight the movement of lower-level indexes at points in the distribution of price changes for a particular time period.
For detailed information regarding the methodology and compilation of trimmed means and weighted medians, see Trend measures of price level change.
The central and local government charges index, which appears in tables 3.01, 3.02, and 3.03, made up 10.46 percent of the CPI at the June 2011 quarter.
Central and local government charges non-standard series includes items such as:
- Housing New Zealand and local authority rentals
- land transfer registration fees
- local authority rates
- water supply and part of refuse disposal, electricity
- prescription charges and oral contraception, general practitioner fees
- vehicle relicensing fees, road user charges, driver licensing fees
- State and integrated schools, tertiary education, other education
- cheque duty, and official passports, licences and certificates.
The goods and services component series that appear in tables 3.01, 3.02, and 3.03 allow users to decompose the CPI into its goods and services components, respectively. The goods component made up 60.04 percent, and the services component 39.96 percent at the June 2011 quarter.
The goods component comprises:
- the food group (except restaurant meals)
- alcoholic beverages and tobacco group
- clothing and footwear group (except clothing services)
- purchase of new housing, property maintenance materials, water supply, and household energy
- household contents and services group (except repair and hire of household appliances, hire of major tools and equipment, and other household services)
- medical products, appliances and equipment; dentures
- purchase of vehicles, vehicle parts and accessories, petrol, other vehicle fuels and lubricants
- telecommunication equipment
- recreation and culture group (except recreational and cultural services, accommodation services, and package holidays)
- miscellaneous goods and services group (except hairdressing and personal grooming services, jewellery and watch repair, insurance, credit services, and other miscellaneous services).
The services component comprises all items not included in the goods component.
Consistency with other periods or datasets
Impact of the Christchurch earthquakes on price collection
There was no material impact on CPI movements from the Christchurch earthquakes in 2010 and 2011.
For goods and services prices collected quarterly from shops in February 2011, collection was completed in all regions before the earthquake. In March, food (and non-food grocery) prices were not collected by Statistics NZ staff in Christchurch city. For Christchurch, price movements for the rest of New Zealand were used to calculate the March 2011 food price index, which represents one-third of the food group in the March 2011 quarter CPI. This approach was also taken for non-food grocery prices for the March month.
For goods and services prices collected quarterly by postal survey (and posted in early February 2011), there were lower-than-usual response rates for Canterbury respondents. The overall response rate for quarterly postal surveys was about 96 percent, compared with about 98 percent over the previous eight quarters. For most parts of the basket, the usual treatment for missing prices in the current quarter is to use the last reported price. With the lower response rate in the March 2011 quarter, there was the potential for the higher level of non-response to slightly flatten the quarterly movement. Therefore, price movements for responding businesses were used to bring the Christchurch response rate up to its usual level.
Statistics NZ began collecting prices again in Christchurch in April 2011.
For goods and services prices collected quarterly from shops for the June 2011 quarter, collection was completed in May. While the June monthly collection of food and non-food grocery prices was put on hold for the remainder of the week following the Monday 13 June earthquakes, pricing was completed on Monday 20 and Tuesday 21 June.
For goods and services prices collected quarterly by postal survey (and posted in early May), the overall response rate for quarterly postal surveys was about 98 percent, which compares well with previous quarters.
By November 2011, when quarterly collection was undertaken, almost all outlets that had not been replaced had reopened.
Index reference period
All CPI indexes have an index reference period of the June 2006 quarter (=1000), except where additional indexes were added in subsequent reviews of the CPI.
Additions to the CPI basket at the June 2008 quarter resulted in the publication of two new indexes at the class level of the New Zealand Household Expenditure Classification (NZHEC). These classes are clothing accessories, and other education. Before the 2008 review, expenditure on goods and services within these two classes was allocated to other apparel and education items, respectively. There was also one new subgroup, for other education. As the two classes and one subgroup were new, they are expressed on the June 2008 quarter (=1000). Similarly, other property related services were added to the CPI in 2011. The other property related services class is expressed on the June 2011 quarter (=1000).
Reconciling the FPI and food group of the CPI
When comparing the FPI and the food group of the CPI, strictly speaking, the quarterly food group index number is not the average of the relevant three monthly FPI numbers. There are some technical differences between the monthly FPI indexes and quarterly indexes.
See Food prices in the consumers price index and food price index for more information.
Treatment of fresh fruit and fresh vegetables – removal of seasonal adjustment
Until the June 2006 quarter, fresh fruit and fresh vegetable items that exhibited a seasonal pattern were adjusted to remove the effect of normal seasonal change. This treatment was used to reduce the influence of normal seasonal price fluctuations. However, the treatment did not completely eliminate the effects of seasonal fluctuations if shifts in seasonal patterns occurred.
From the September 2006 quarter onwards, the CPI incorporates seasonally unadjusted prices for fresh fruit and fresh vegetables. This is in line with a recommendation made by the 2004 CPI Revision Advisory Committee.
The ongoing, fully unadjusted CPI is linked at the June 2006 quarter to the previously published CPI, which is partly seasonally adjusted. As such, annual movements calculated over the annual period encompassing the June 2006 quarter are based on fully unadjusted index numbers for the latest quarter, compared with partly adjusted index numbers for the same quarter of the previous year. However, analytical time series provided annual movements on a fully unadjusted basis during the year-long transition of the official CPI. During this time, annual movements were based on fully unadjusted index numbers for the latest quarter, compared with partly adjusted index numbers for the same quarter of the previous year.
Availability of regional indexes
Indexes are published for five broad regions: Auckland, Wellington, Canterbury (encompasses Christchurch and Timaru), rest of North Island, and rest of South Island. These series are considered to be fit for purpose and do not make significant use of national pricing indicators in their compilation.
Until the June 2006 quarter, indexes were published for 15 regions. These series were not considered 'fit for purpose', as price movements from national or broad-region price collection were used to compile them. Series for the 15 regions continue to be calculated and are available only upon request.
Interpreting the data
Rounding of index numbers and calculation of percentage changes
Percentage changes are published to one decimal place and are calculated from index numbers rounded to the nearest index point. For comparisons that cross the index reference period, rounded index numbers (for the later period) should be compared to unrounded index numbers (for the earlier period).
Distribution of item-level index movements table
The Distribution of item-level index movements table in this release gives additional information on the distribution of price movements for the current quarter's CPI. The analytical statistics in the table give an indication of how widespread price changes are, and their relative magnitude when compared with previous quarters.
The weighted average price increase and decrease uses unrounded index numbers for the previous and current periods to calculate item-level price movements from the previous period, and these are weighted using previous period expenditure weights. The previous period expenditure weight for an item is calculated by updating base-period expenditure weights, using the price change for the item from the base period to the previous period.
Movements based on unrounded index numbers are used to determine whether items have increased, showed no change, or decreased in price. Previous period expenditure weights are used to indicate the proportion of the expenditure weight that has increased, showed no change, or decreased.
Detailed contribution information tables
Tables 8.01 and 8.02 include supplementary analytical information for group, subgroup, and class contributions to the overall change in the all groups CPI. The contribution information is given as index points, percentage points, and percentage contributions from the previous quarter and from the same quarter of the previous year. These tables are included to provide a broader perspective of the categories contributing to the movement in the all groups CPI. Where there is only one class within a subgroup, the class is omitted to avoid unnecessary duplication.
The index points, percentage points, and percentage contribution information in tables 8.01 and 8.02 is calculated from unrounded index numbers. Percentage changes are calculated from index numbers rounded to the nearest index point (see 'Rounding of index numbers and calculation of percentage changes', above). As such, the sum of each of the group, subgroup, or class percentage point contributions may differ from the overall percentage change in the CPI all groups.
Weighted average retail prices of selected food items
A selection of average retail prices for the current and previous quarter is included in table 5 of this release. The weighted average prices are calculated by applying index movements to weighted average prices for the June 2006 quarter CPI. They are not statistically accurate measures of average transaction price levels, but do provide a reliable indicator of percentage changes in prices.
Determining the effect of a specified change in a lower-level index
As the CPI and FPI were reweighted at the June 2011 quarter, but continue to be published on an index reference period of June 2006 quarter (=1000), the method used to determine the effect that a specified change in a lower-level index would have on a higher-level index to which it contributes has been modified for the September 2011 quarter and subsequent quarters.
The index points effect and percentage contribution on a higher-level index of a specified percentage change in a lower-level index that contributes to the higher-level index can be determined by:
- Adjust the lower-level index for the previous period (In-1,low) by the specified percentage change (PCn,low) to derive the index number for the current period:
- Calculating the index points effect on the higher-level index of the specified change in the lower-level index:
- Calculating the percentage change in the higher-level index that would be caused by the specified change in the lower-level index:
I : index
n : period n, where n is the September 2011 quarter or a subsequent quarter (CPI), or the July 2011 month or a subsequent month (FPI)
n-1 : period n-1
Jun11 : June 2011 quarter (CPI) or June 2011 month (FPI)
low : lower-level index
high : higher-level index
W : expenditure weight, expressed as a percentage of the all groups (CPI) or group (FPI) index
PC : percentage change
PE : index points effect
low-on-high : lower-level index on higher-level index
The effect that a 5.0 percent increase in the petrol index (which has a weight of 5.27 percent in the CPI) from the June 2011 quarter to the September 2011 quarter would have on the all groups CPI index can be calculated by:
- Increasing the petrol index for the June 2011 quarter by 5.0 percent to derive the index number for the September 2011 quarter:
- Calculating the index points effect on the all groups CPI index of the 5.0 percent increase in the petrol index:
- Calculating the percentage change in the all groups CPI index that would be caused by a 5.0 percent change in the petrol index:
Timing of published data
The CPI is published 12 working days after the reference quarter.
CPI rolling review of retail outlets
We are currently working on an ongoing rolling review of the retail outlets we visit for the consumers price index (CPI). Statistics NZ price collectors visit these retail outlets to gather price information.
The CPI basket items we track at retail outlets have been organised into eight review groups. The outlets we visit and the item pricing specifications will be reviewed for one group each quarter.
The eight review groups are:
- clothing, footwear, and furniture
- services, vehicles, and personal goods
- sports and stationery
- consumer electronics (annual review)
- convenience stores
- supermarkets: food
- supermarkets: non-food
- consumer electronics (annual review).
The July issue of the Price Index News has more information on the scope of the review.
Changes made to the first review group (clothing, footwear, and furniture) have been implemented in this release.
For the second review group, we reviewed the outlets visited for services, vehicles, and personal goods, for example, jewellery and cosmetics. The sample of retail outlets we visit has been reallocated for the following items tracked in the CPI:
- plastic storage containers – we are now visiting more supermarkets to better reflect the mix of outlets people buy these items from
- vehicle parts and accessories – we are now visiting more non-chain retailers to better reflect market shares
- cosmetics, toiletries, suitcases, and handbags – we are now visiting more specialist stores.
Price collection for DVD movie hire has also been expanded to include Blu-ray movie hire. Changes to this group will be implemented in the Consumers Price Index: December 2012 quarter, to be released in January 2013.
For more information on the CPI rolling retail outlet review, please contact:
Wellington 04 931 4600
More information about the Consumers Price Index is available on our website.
While all care and diligence has been used in processing, analysing, and extracting data and information in this publication, Statistics NZ gives no warranty it is error-free and will not be liable for any loss or damage suffered by the use directly, or indirectly, of the information in this publication.
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