Capital Goods Price Index: March 2010 quarter

Capital goods price index

The capital goods price index (CGPI) fell 0.1 percent in the March 2010 quarter. The latest decrease compares with falls of 0.2 percent in the December 2009 quarter and 0.4 percent in the September 2009 quarter.

Two out of six asset groups in the CGPI fell in the March 2010 quarter. The plant, machinery, and equipment index fell 0.6 percent, making the most significant downward contribution to the CGPI, while the non-residential buildings index fell 0.1 percent. The transport equipment index rose 0.5 percent in the March 2010 quarter, making the most significant upward contribution to the CGPI, followed by the residential buildings index (up 0.1 percent).

The following table shows the amount that each asset group contributed to the all groups CGPI movement from the December 2009 quarter to the March 2010 quarter.

 

The CGPI fell 0.4 percent in the year to the March 2010 quarter. The annual decrease follows rises of 4.9 percent in the year to the March 2009 quarter and 2.5 percent in the year to the March 2008 quarter. The latest annual fall is the first annual decrease since the December 1998 quarter.

Plant, machinery, and equipment 

The most significant downward contribution to the CGPI came from the plant, machinery, and equipment index, which fell 0.6 percent in the March 2010 quarter.

The plant, machinery, and equipment index measures items such as computer machinery, furniture, and machinery for mining, quarrying, and construction. The major downward contributions came from the furniture sub-index (down 2.9 percent) and the television and radio transmitters and apparatus sub-index (down 3.2 percent), with lower prices resulting from discounting. The computer machinery sub-index (up 1.6 percent) made an upward contribution, with the rise being due to the depreciation of the New Zealand dollar against the United States dollar in this quarter.

On an annual basis, the plant, machinery, and equipment index fell 1.4 percent in the year to the March 2010 quarter. This is the first annual decrease in this series since the December 2005 quarter.

Non-residential buildings

The non-residential buildings index fell 0.1 percent in the March 2010 quarter, following falls of 1.0 percent and 1.4 percent in the December and September 2009 quarters, respectively. This index made the second largest downward contribution to the CGPI.

The main contributors were the sub-indexes for farm buildings (down 1.0 percent), warehouses and factories (down 0.1 percent), and shops and offices (down 0.1 percent). Falling material prices for items such as stainless steel, along with lower local demand were cited as the main reasons for the falls.

In the year to the March 2010 quarter, the non-residential buildings index fell 3.5 percent, following falls of 3.8 percent in the year to the December 2009 quarter and 3.1 percent in the year to the September 2009 quarter.

Transport equipment

The transport equipment index (up 0.5 percent) made the most significant upward contribution to the CGPI in the March 2010 quarter. This followed increases of 0.4 percent and 0.8 percent for the December and September 2009 quarters, respectively.

The major upward contributions came from the sub-indexes for commercial vehicles 3500kg and under (up 0.7 percent) and helicopters (up 7.2 percent, reflecting the depreciation of the New Zealand dollar).

In the year to the March 2010 quarter, the transport equipment index rose 3.1 percent. This annual increase follows a rise of 6.5 percent in the year to the March 2009 quarter and a 0.4 percent fall in the year to the March 2008 quarter.

 

Residential buildings

The residential buildings index rose 0.1 percent in the March 2010 quarter. The latest rise follows a 0.1 percent rise in the December 2009 quarter and a 0.4 percent fall in the September 2009 quarter. Higher prices for dwellings and out-buildings (up 0.2 percent) were partly offset by the hostels and boarding houses sub-index (down 0.1 percent).

For the year to the March 2010 quarter the residential buildings index continued a downward trend, falling 0.4 percent, following a 1.9 percent rise in the year to the March 2009 quarter and a 5.0 percent rise in the year to the March 2008 quarter.

Other construction

The other construction index rose 0.3 percent in the March 2010 quarter, which is the smallest quarterly rise since the September 2003 quarter. The latest rise follows a 1.4 percent rise in the December 2009 quarter and a 0.5 percent rise in the September 2009 quarter. Higher prices for transport ways and pipelines contributed to the increase.
 
The other construction index rose 3.2 percent in the year to the March 2010 quarter, following rises of 6.4 percent and 3.7 percent in the years to the March 2009 and March 2008 quarters, respectively.

Impact of exchange rates

When calculating the CGPI, prices collected on the 15th 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 prices are converted to New Zealand dollars using the exchange rates at the time of pricing.

In the March 2010 quarter, the New Zealand dollar depreciated against four key currencies of the country's five major trading partners, while appreciating against the euro. The table below shows changes in the value of the New Zealand dollar in foreign currency denominations from the December 2009 quarter to the March 2010 quarter.

Price index development 

Next release ...

Capital Goods Price Index: June 2010 quarter will be released on 19 August 2010.