NZ producer output prices fall 0.8% in fourth quarter, led by dairy, dairy cattle, petroleum

Thursday 18th February 2016

New Zealand producer output prices fell in the fourth quarter, led by dairy product manufacturing, dairy cattle farming and petroleum, while farm input prices also fell.

The output producers price index fell 0.8 percent in the final three months of 2015, for an annual decline of 0.6 percent, while the input PPI fell 1.2 percent in the quarter and 1.1 percent in the year, Statistics New Zealand said.

The prices dairy product manufacturers receive fell 10 percent in the fourth quarter, reflecting lower prices for milk powder, cheese and butter, while prices for dairy cattle farming outputs fell 9.2 percent. Input prices for dairy manufacturers declined 7.1 percent, reflecting lower farm-gate milk prices. Weakness in dairy industry prices is indicative of a global market where increased production from Europe has resulted in plentiful supply of dairy products. Dairy product prices fell in the latest GlobalDairyTrade auction, sliding for the fourth consecutive time in 2016, as concern about worldwide oversupply weighs on sentiment.

Petroleum and coal manufacturing output prices fell 10 percent and inputs declined 22 percent, reflecting lower prices for crude oil, petrol and diesel, the government statistician said. Brent crude oil has tumbled 39 percent since mid-2014, to trade recently at US$34.85 a barrel.

Output prices in the construction industry rose 0.4 percent in the quarter, while input prices fell 0.3 percent, mainly reflecting lower fuel costs.

Prices for capital goods rose 0.6 percent in the quarter and 3.2 percent in the year while prices paid by consumers fell 0.5 percent, for an annual gain of just 0.1 percent.

BusinessDesk.co.nz

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