Capital goods post 12th straight rise

Capital goods prices rose 0.8 per cent in the March quarter, driven by continued strength in the residential building sector, Statistics New Zealand said today.

The Capital Goods Price Index (CGPI) posted its 12th consecutive quarterly increase, with the residential building component making the most significant upward contribution, at 1 per cent.

On an annual basis, the CGPI was up 3.1 per cent.

Transport equipment was the only asset group to record a price decrease in the quarter, falling 0.6 per cent. Price falls for commercial vehicles and cars were the main contributors.

Residential building has dominated the index for the past 4-1/2 years as the property market has experienced a major boom.

Respondents cited increasing prices for construction components, higher prices for fittings, increased sub-contractors' charges and increased labour costs as reasons for the price increases .

In the year to March 2006, the residential buildings index rose 5.9 per cent.

Another significant upward contribution to the CGPI came from the non-residential buildings index, which rose 1.7 per cent in the March quarter.

Increasing costs for construction components and raw material prices were the main drivers. Non-residential building costs rose 4.5 per cent in the year to March.

- NZPA