Outputs index down, inputs up for the December quarter

The producers price index (PPI) outputs index fell 0.4 per cent and the PPI inputs index rose 0.3 per cent in the December quarter, Statistics New Zealand said today.

Both indexes were strongly influenced by prices received by farmers and prices paid and received by food manufacturers.

The PPI measures changes in prices received by producers (known as output prices), and changes in the costs of production, excluding labour and depreciation costs (known as input prices).

Key influences on the outputs index included an 8.5 per cent decline for meat and meat product manufacturing, driven by lower export lamb and beef prices, a 4.8 per cent decline for livestock and cropping farming, driven by lower prices for sheep and cattle, and a 17.8 per cent increase for dairy cattle farming, driven by higher forecast prices for milk.

Key influences on the inputs index were a 15.2 per cent increase for dairy product manufacturing, a 6.7 per cent increase for electricity generation and supply, driven by higher costs of electricity generation and natural gas, a 9.3 per cent decline for meat and meat product manufacturing and a 0.9 per cent decline for wholesale trade, driven by lower imported crude oil prices.

Statistics NZ said output prices fell 3.8 per cent overall in the year to the December 2009 quarter, which is the largest annual fall since the series began in the December 1977 quarter. Input prices fell 3.3 per cent in the year to the December 2009 quarter.

- NZPA