Lower dollar drives up capital goods prices

The Capital Goods Price Index (CGPI) rose 1.2 percent in the March 2009 quarter, Statistics New Zealand said today. The most significant upward contribution came from the plant, machinery and equipment index (up 2.7 percent). This rise was mainly due to the depreciation of the New Zealand dollar. In the year to the March 2009 quarter, the plant, machinery and equipment index rose 9.0 percent.

The second largest upward contribution to the CGPI this quarter was from the transport equipment index, which rose 3.8 percent. This rise was also mainly driven by the depreciation of the New Zealand dollar.

In the March 2009 quarter, falls were recorded in the non-residential buildings index (down 0.4 percent) and the residential buildings index (down 0.1 percent). The fall in the non-residential buildings index, which was the main offsetting contribution to the CGPI this quarter, follows a 0.2 percent fall in the December 2008 quarter. This quarter's downward movement was driven by a decrease in labour costs for the construction of shops and offices; and warehouses and factories.

On an annual basis, the CGPI rose 4.9 percent in the year to the March 2009 quarter. This rise is the largest annual movement since the series began in the December 1989 quarter, following rises of 2.5 percent and 3.6 percent in the years to the March 2008 and the March 2007 quarters, respectively.

Geoff Bascand Government Statistician

18 May 2009

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See also the Hot Off The Press information release Capital Goods Price Index: March 2009 quarter.

Capital Goods Price Index: March 2009 quarter (pdf)