Producer prices in New Zealand rise in Q2 on increased electricity and fuel prices

New Zealand’s producer prices increased in the second quarter thanks to rise in electricity and fuel prices, according to Statistics New Zealand. Output producer prices rose 0.2 percent in sequential terms, after declining 0.2 percent in the first quarter. On a year-on-year basis, producer prices were up 0.5 percent, quickening from the 0.1 percent recorded in the first quarter.

The input prices rose 0.9 percent quarter-on-quarter, whereas it grew 0.3 percent in year-on-year terms in the second quarter. In the initial three months, input prices had dropped 0.1 percent in sequential terms and 0.9 percent in annual terms.

The input prices for the petroleum and coal product manufacturing industry were up 22 percent in the second quarter because of higher international prices for crude oil. In the first quarter of 2016 and fourth quarter of 2015, the prices had dropped 22 percent in each quarter.

“Despite the June quarterly increase in costs paid by fuel manufacturers, fuel prices have fallen by about half since mid-2012”, said Statistics New Zealand business prices manager Sarah Williams.

The rise in fuel price in the June quarter added to the higher input and output prices in the mining industry. Increased fuel prices also resulted in higher input prices for other industries such as farming and construction.

Meanwhile, output prices for the gas and electricity supply industry were up 1.9 percent in the second quarter, thanks to increased retail electricity prices. Prices usually increase in June quarters, reflecting higher seasonal demand in the winter months, stated Statistics New Zealand. The lower electricity generation prices led to input prices in the industry to drop 0.3 percent.