Consumers Price Index: December 2008 quarter

Consumers Price Index quarterly movement

The Consumers Price Index (CPI) recorded a decrease of 0.5 percent in the December 2008 quarter, following increases of 1.5 percent and 1.6 percent in the September and June 2008 quarters, respectively. This is the largest quarterly decrease since the December 1998 quarter, when the CPI decreased 0.8 percent.

Only two of the 11 CPI groups recorded decreases in the December 2008 quarter. Downward contributions came from the transport (down 7.6 percent), and communication (down 0.4 percent) groups.

Nine groups recorded increases, with food (up 1.5 percent), housing and household utilities (up 0.6 percent), and recreation and culture (up 1.5 percent) being the most significant contributors. Other upward contributions came from miscellaneous goods and services (up 0.7 percent), clothing and footwear (up 0.9 percent), health (up 0.6 percent), household contents and services (up 0.5 percent), alcoholic beverages and tobacco (up 0.4 percent), and education (up 0.1 percent).

The most significant individual downward contributions came from lower prices for petrol (down 22.4 percent), lettuce (down 65.8 percent), and diesel (down 26.9 percent).

The most significant individual upward contributions came from higher prices for international air transport (up 6.9 percent), overseas package holidays (up 7.5 percent), and electricity (up 2.0 percent). 

 Note: Index points contributions may not sum to totals due to rounding.

 

 

Distribution of item-level movements

The table below outlines the distribution of price movements in the September and December 2008 quarters. The CPI has been partitioned into those national item-level indexes that increased, showed no change, or decreased.

CPI annual movement

The CPI increased 3.4 percent in the year from the December 2007 quarter to the December 2008 quarter, following increases of 5.1 percent and 4.0 percent for the years to the September and June 2008 quarters, respectively.

Ten of the 11 groups in the CPI made upward contributions to the annual increase in the year to the December 2008 quarter. The most significant upward contributions came from the food (up 9.4 percent), and housing and household utilities (up 4.3 percent) groups.

The only downward contribution came from the communication group (down 1.1 percent).

The most significant individual upward contributions came from higher prices for electricity (up 7.7 percent), actual rentals for housing (up 3.0 percent), and purchase of new housing (up 3.1 percent).

The most significant individual downward contributions came from lower prices for audio-visual equipment (down 22.2 percent), petrol (down 4.8 percent) and purchase of second-hand motor cars (down 6.5 percent).

CPI all groups and tradable and non-tradable component series

In the December 2008 quarter, the tradable component decreased 2.1 percent, following an increase of 1.9 percent in the September 2008 quarter. The most significant contribution came from petrol. The tradable component would have increased 0.9 percent if petrol and diesel prices had remained unchanged from the September 2008 quarter.

The non-tradable component increased 0.8 percent, following an increase of 1.3 percent in the September 2008 quarter.

For the year to the December 2008 quarter, the non-tradable component increased 4.3 percent. This is the largest annual increase in the non-tradable component since the December 2005 quarter. Significant upward contributions to the latest annual movement came from electricity, actual rentals for housing, purchase of new housing, and local authority rates and payments.

The tradable component rose 2.3 percent for the year to the December 2008 quarter. The most significant downward contribution to the tradable component came from petrol. If petrol and diesel prices had remained constant from the December 2007 quarter to the December 2008 quarter, the tradable component would have increased 2.6 percent.

  

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Transport

Prices for the transport group fell 7.6 percent in the December 2008 quarter, following rises of 2.0 percent and 4.9 percent in the September and June 2008 quarters, respectively.

The most significant individual downward contributions came from lower prices for petrol (down 22.4 percent) and diesel (down 26.9 percent). Petrol and diesel pump prices peaked in early July 2008 and fell steadily over the following months. In the final week of December, prices had fallen to about 12 percent below the overall average for the December 2008 quarter. If petrol and diesel prices had remained constant from the September 2008 quarter to the December 2008 quarter, the CPI would have increased 0.9 percent.

The most significant upward contribution came from higher prices for international air transport (up 6.9 percent).

The transport group decreased 0.3 percent from the December 2007 quarter to the December 2008 quarter. The most significant individual downward contributions came form lower prices for petrol (down 4.8 percent) and purchase of second-hand motor cars (down 6.5 percent). If petrol prices had remained constant from the December 2007 quarter to the December 2008 quarter, the CPI would have increased 3.6 percent.

Food

Prices for the food group rose 1.5 percent in the December 2008 quarter, following rises of 3.7 percent and 2.2 percent in the September and June 2008 quarters, respectively. If food prices had remained constant from the September 2008 quarter, the CPI would have decreased by 0.7 percent.

The most significant upward contributions came from higher prices for the meat, poultry and fish (up 6.3 percent), and grocery food (up 2.6 percent) subgroups. These were driven by higher prices for beef (up 9.3 percent), prepared meats and smallgoods (up 8.3 percent), bread (up 5.4 percent), poultry (up 5.8 percent), and cakes and biscuits (up 4.8 percent).

The most significant downward contribution came from the fruit and vegetables subgroup (down 5.9 percent), driven by lower prices for vegetables (down 15.5 percent). The most significant individual contributions came from lower prices for lettuce (down 65.8 percent), tomatoes (down 36.9 percent), and cucumber (down 53.0 percent). Vegetable prices had risen strongly over the September 2008 quarter, with growing conditions being hampered by unusually wet weather. In the latest quarter, an upward contribution came from fruit (up 12.0 percent), largely driven by apples (up 42.0 percent).

The food group increased 9.4 percent from the December 2007 quarter to the December 2008 quarter, accounting for half the increase in the CPI for the year to the December 2008 quarter. All five of the food subgroups increased in price, with the most significant contribution coming from the grocery food subgroup (up 11.2 percent). While fruit and vegetable prices were down 5.9 percent in the December 2008 quarter, prices were up 11.5 percent for the year. 

 

 

 

Housing and household utilities

The housing and household utilities group increased 0.6 percent in the December 2008 quarter, following increases of 1.4 percent and 1.2 percent in the September and June 2008 quarters, respectively.

The most significant individual upward contributions came from higher prices for electricity (up 2.0 percent) and actual rentals for housing (up 0.4 percent). Actual rentals for housing has increased every quarter since June 2001.

Prices for the purchase of new housing decreased 0.2 percent in the December 2008 quarter, following increases of 1.3 percent and 1.1 percent in the September 2008 and June 2008 quarters, respectively. This is the first fall in prices for the purchase of new housing since the March 1999 quarter. Changes in the quality of new dwellings in Auckland and further north (resulting from amendments to the Building Act (2004) whereby new homes are required to be more energy efficient) have been adjusted for this quarter. Of the respondents reporting in the December 2008 quarter, 65 percent showed no change in price (after adjusting for quality change), 22 percent showed increases, and 13 percent showed decreases.

The housing and household utilities group increased 4.3 percent from the December 2007 quarter to the December 2008 quarter. The most significant upward contributions came from higher prices for electricity (up 7.7 percent), actual rentals for housing (up 3.0 percent), the purchase of new housing (up 3.1 percent), and local authority rates and payments (up 5.7 percent). 

 

 

Other groups

In the December 2008 quarter, upward movements were also recorded for the following groups: recreation and culture (up 1.5 percent), miscellaneous goods and services (up 0.7 percent), clothing and footwear (up 0.9 percent), health (up 0.6 percent), household contents and services (up 0.5 percent), alcoholic beverages and tobacco (up 0.4 percent), and education (up 0.1 percent). Combined, these groups contributed 3.38 index points to the overall CPI movement.

In the December 2008 quarter, a downward movement was recorded for the communication group (down 0.4 percent), contributing -0.13 index points to the overall CPI movement.

The most significant upward contribution to the other groups came from higher prices for overseas package holidays (up 7.5 percent).

The most significant downward contribution to the other groups came from lower prices for audio-visual equipment (down 4.7 percent).

For technical information contact:
Gareesh Madhas or Daniel Griffiths
Wellington 04 931 4600
Email: info@stats.govt.nz

Next release ...

Consumers Price Index: March 2009 quarter will be released on 17 April 2009.