Capital Goods Price Index
The Capital Goods Price Index (CGPI) rose 1.1 percent in the December 2008 quarter. The latest rise followed rises of 1.4 percent in the September 2008 quarter, and 1.0 percent in the June 2008 quarter.
Four out of six asset groups in the CGPI rose in the December 2008 quarter. The most significant upward contribution to the CGPI was the plant, machinery and equipment index which rose 3.4 percent. Further positive contributions came from the transport equipment index (up 1.5 percent), the other construction index (up 0.9 percent), and the land improvements index (up 2.0 percent). Some offsetting impact came from both the residential buildings index (down 0.3 percent) and the non-residential buildings index (down 0.2 percent).
The following table shows the amount that each asset group contributed to the All Groups CGPI movement from the September 2008 quarter to the December 2008 quarter.
Capital Goods Price Index
Index points contribution |
| Asset group |
December 2008 quarter |
Plant, machinery and equipment
Transport equipment
Other construction
Land improvements
Residential buildings
Non-residential buildings
|
11.71
2.03
1.17
0.46
-0.37
-0.95
|
| All groups |
14.05 |
| Note: Points contributions may not sum to total due to rounding. |
On an annual basis, the CGPI rose 4.1 percent from the December 2007 quarter to the December 2008 quarter. This follows rises of 2.3 percent in the year to the December 2007 quarter, and 4.1 percent in the year to the December 2006 quarter.
Plant, machinery and equipment
The plant, machinery and equipment index rose 3.4 percent in the December 2008 quarter. This was the most significant upward contribution to the CGPI and the largest upward movement since a 4.1 percent rise in the December 2000 quarter. The latest rise follows rises of 1.1 percent in the September 2008 quarter and 1.5 percent in the June 2008 quarter.
The latest rise in the plant, machinery and equipment index was driven by higher prices for other special purpose machinery, mainly book binding and printing machinery (due to higher suppliers' prices and the depreciation of the New Zealand dollar); and higher prices for lifting and handling equipment, and machinery for mining, quarrying and construction (mainly due to the depreciation of the New Zealand dollar).
In the year to the December 2008 quarter, the plant, machinery and equipment index rose 6.0 percent. This follows annual rises of 0.4 percent in the year to the December 2007 quarter and 3.2 percent in the year to the December 2006 quarter. The latest annual rise is the largest since a 7.8 percent rise in the year to the December 2000 quarter.
Transport equipment
The second largest contribution to the CGPI was from the transport equipment index which rose 1.5 percent in the December 2008 quarter. The latest quarterly rise was the largest since a 1.9 percent rise in the December 2000 quarter. The latest quarter's upward movement was driven by the depreciation of the New Zealand dollar, which led to higher prices for cars over 1600cc, commercial vehicles over 3500kg, and imported buses.
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In the year to the December 2008 quarter, the transport equipment index rose by 2.6 percent. This was the largest annual rise since a 3.5 percent rise in the year to the September 2001 quarter. This latest annual movement follows falls of 0.5 percent and 0.9 percent in the years to the December 2007 and the December 2006 quarters, respectively.
Other construction
The other (non-building) construction index rose 0.9 percent in the December 2008 quarter. This latest rise follows rises of 2.2 percent in the September 2008 quarter and 1.5 percent in the June 2008 quarter. The rise in the latest quarter resulted from higher prices for aluminium pipes and polyethylene tubes for the construction of water supply systems (due to higher suppliers' prices for raw materials and the depreciation of the New Zealand dollar); increased leasing and rental costs of machinery and equipment for the construction for urban drainage and sewerage systems; and higher plumbing installation costs for the construction of swimming pools.
In the year to the December 2008 quarter, the other construction index rose 5.5 percent. This follows rises of 3.3 percent and 4.5 percent in the years to the December 2007 and the December 2006 quarters, respectively.
Residential buildings
The residential buildings index fell 0.3 percent in the December 2008 quarter, the first quarterly fall since a 0.1 percent fall in the December 1998 quarter. The latest quarterly downward movement was driven by lower prices for reinforcements and structural steel works, reduced contractors' margins for the construction of apartment buildings, and lower prices for the construction of new houses.
In the year to the December 2008 quarter, the residential buildings index rose 2.9 percent, following much higher annual rises of 5.1 percent each in the years to the December 2007 and the December 2006 quarters.
Non-residential buildings
The non-residential buildings index fell 0.2 percent in the December 2008 quarter, the first fall since a 0.1 percent fall in the June 2000 quarter. This latest movement follows rises of 1.6 percent in the September 2008 quarter, and 0.6 percent in the June 2008 quarter. The latest fall was mainly driven by decreases in the costs of structural steel work, and reduced contractors' margins for the construction of warehouses and factories, shops and offices, and hotels.
In the year to the December 2008 quarter, the non-residential buildings index rose 3.0 percent. This compares with rises of 1.4 percent in the year to the December 2007 quarter, and 6.7 percent in the year to the December 2006 quarter.
Impact of exchange rates
When calculating the CGPI, prices collected on the fifteenth day of the middle month in the quarter are generally used to represent the entire quarter. Prices collected for imported goods are often denominated in foreign currencies. These are converted to New Zealand dollars using the exchange rates at the time of pricing.
The New Zealand dollar depreciated against three currencies of the country's five major trading partners in the December 2008 quarter. Significant depreciations were recorded against the Japanese yen and the US dollar compared with relatively moderate depreciation against the euro in the latest quarter. The New Zealand dollar appreciated against the UK pound and the Australian dollar. The table below shows changes in the value of the New Zealand dollar, in foreign currency denominations, from the September 2008 quarter to the December 2008 quarter.
Exchange Rates
(Published by Westpac Bank)
Bank selling rates for NZ$1.00 |
| |
USA
(NZ$:US$) |
UK
(NZ$:Pound) |
Australia
(NZ$:AUS$) |
Japan
(NZ$:Yen) |
Europe
(NZ$:Euro) |
15 August 2008
15 November 2008 |
0.6909
0.5447 |
0.3699
0.3732 |
0.7941
0.8588 |
75.6480
52.0542 |
0.4649
0.4363 |
| Percentage change |
-21.2 |
0.9 |
8.1 |
-31.2 |
-6.2 |
For technical information contact:
Suchindra Nanayakkara or Mark Gordon
Wellington 04 931 4600
Email: info@stats.govt.nz
Next release ...
Capital Goods Price Index: March 2009 quarter will be released on
18 May 2009.