Capital Goods Price Index: March 2009 quarter

Capital Goods Price Index

The Capital Goods Price Index (CGPI) rose 1.2 percent in the March 2009 quarter. The latest rise followed rises of 1.1 percent in the December 2008 quarter, and 1.4 percent in the September 2008 quarter.

Three out of six asset groups in the CGPI rose in the March 2009 quarter. The most significant upward contribution to the CGPI was the plant, machinery and equipment index which rose 2.7 percent. Further positive contributions came from the transport equipment index (up 3.8 percent), and the other construction index (up 1.6 percent). Some offsetting impact came from both the residential buildings index (down 0.1 percent) and the non-residential buildings index (down 0.4 percent).

The following table shows the amount that each asset group contributed to the All Groups CGPI movement from the December 2008 quarter to the March 2009 quarter. 

Plant, machinery and equipment

The plant, machinery and equipment index rose 2.7 percent in the March 2009 quarter. This was the most significant upward contribution to the CGPI and follows rises of 3.4 percent in the December 2008 quarter and 1.1 percent in the September 2008 quarter.

The rise in the plant, machinery and equipment index was driven by higher prices for mining, quarry and construction machinery (up 11.5 percent); other special purpose machinery (up 3.6 percent); and measuring, testing and navigating instruments (up 8.7 percent). These increases were mainly due to the depreciation of the New Zealand dollar.

In the year to the March 2009 quarter, the plant, machinery and equipment index rose 9.0 percent, which is the largest annual movement since the series began in the December 1989 quarter. This follows annual rises of 0.3 percent in the year to the March 2008 quarter and 2.8 percent in the year to the March 2007 quarter.

Transport equipment

The second largest contribution to the CGPI this quarter was from the transport equipment index, which rose 3.8 percent for the March 2009 quarter. This rise is the largest for transport equipment since the series began in the December 1989 quarter. The main contributor to this increase was for prices of cars over 1600cc, which increased 3.0 percent this quarter. The increases for transport equipment were mainly driven by the depreciation of the New Zealand dollar.

In the year to the March 2009 quarter, the transport equipment index rose by 6.5 percent. This is the largest annual rise since a 6.6 percent rise in the year to the March 1993 quarter. This latest annual movement follows falls of 0.4 percent in the year to the March 2008 quarter and 0.5 percent in the year to the March 2007 quarter.

Other construction

The other construction index rose 1.6 percent in the March 2009 quarter. This follows rises of 0.9 percent and 2.2 percent in the December 2008 and September 2008 quarters, respectively. The rise this quarter resulted from higher prices for concrete pipes in the construction of urban drainage and sewage systems (due to higher suppliers' prices for raw materials and the depreciation of the New Zealand dollar); and increased costs for the construction of roads.

In the year to the March 2009 quarter, the other construction index rose by 6.4 percent. This is the largest annual upward movement since a 6.9 percent rise in the year to the December 2005 quarter. The latest annual rise follows rises of 3.7 percent and 4.1 percent in the years to the March 2008 and the March 2007 quarters, respectively.

Residential buildings

The residential buildings index fell 0.1 percent in the March 2009 quarter following a fall of 0.3 percent in the December 2008 quarter. The latest fall was driven by reduced labour costs for the construction of apartment buildings. Slightly offsetting this decrease was an increase in the construction of new houses sub-index.

In the year to the March 2009 quarter, the residential buildings index rose by 1.9 percent. This is the smallest annual upward movement since a 1.8 percent rise in the year to the December 2001 quarter. The latest annual rise follows rises of 5.0 percent and 5.1 percent in the years to the March 2008 quarter and the March 2007 quarter, respectively.

Non-residential buildings

The non-residential buildings index fell 0.4 percent in the March 2009 quarter, which is the largest downward movement since a 0.5 percent fall in the June 1998 quarter. The latest quarterly downward movement follows a fall of 0.2 percent in the December 2008 quarter, and was driven by lower labour costs in the construction of shops and offices; and warehouses and factories.

In the year to the March 2009 quarter, the non-residential buildings index rose by 1.5 percent. This is the smallest annual upward movement since a 1.4 percent rise in the year to the December 2007 quarter. The latest annual rise follows rises of 2.3 percent and 5.0 percent in the years to the March 2008 and the March 2007 quarters, respectively. 

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 all currencies of the country's five major trading partners in the March 2009 quarter. The table below shows changes in the value of the New Zealand dollar, in foreign currency denominations, from the December 2008 quarter to the March 2009 quarter.

Next release ...

Capital Goods Price Index: June 2009 quarter will be released on 19 August 2009.