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Higher electricity costs drove up the prices paid and received by producers in the June quarter to the highest levels in more than quarter of a century.
Figures out today from Statistics New Zealand show input prices - which measure price changes in costs of production, excluding labour and depreciation - rose 5.6 per cent in the three months.
That was the largest rise since 1980 and compared with a median prediction of 2.6 per cent in a Reuters poll of economists.
Producers output prices - measuring changes in prices received by producers - were up 3.5 per cent, the largest quarterly rise since 1985 and above the median expectation of 2.1 per cent.
Despite the size of the increases, ASB Bank chief economist Nick Tuffley said the implications were "pretty limited" from an inflation perspective.
That was partly because prices had fallen back so there would be an unwind in the third quarter, and also because there was not much relation to retail prices, said Tuffley.
Today's increases were mostly due to drought and its impact on wholesale power prices.
"The headlines look ugly, but the drought is what has caused that and the impact on wholesale prices has been largely unwound."
SNZ said the rises in both input and output prices were mainly driven by higher prices for electricity generation and supply, with respondents reporting that lower lake levels had pushed up spot prices.
The electricity generation and supply outputs index rose 30.9 per cent in the latest quarter, and 41.7 per cent in the year to June - both the largest increases since the series started in 1994.
Within the inputs index, electricity generation and supply rose 50.8 per cent in the latest quarter and 85.4 per cent in the year to June - both the largest since the series began in June 1994.
Wholesale trade also made a contribution to both the output and input indexes, with the outputs index up 6 per cent in the June quarter and the inputs index up 6.4 per cent.
In both cases the increase was driven by higher prices in the mineral, metal and chemical wholesaling sector, SNZ said.
In the June year the outputs index rose 8.5 per cent and the inputs index rose 11.8 per cent.
SNZ also reported today that the capital goods price index rose 1 per cent in the June quarter.
Increased prices for plant, machinery and equipment, and higher construction costs for new houses were the main contributors to the rise.
In the year to June, the index rose 3.1 per cent.
- NZPA
