19 May 2015

Producer prices fall due to lower fuel prices

1:51 pm on 19 May 2015

Producer prices have continued to fall due to lower fuel prices.

BP Fuel Pump.

Prices at the pump dropped 2.5 percent from the previous year. Photo: RNZ / Alexander Robertson

Official figures show the producers price input index fell 1.1 percent in the three months to March, compared with the previous quarter, and was down 4 percent year on year.

In turn, the prices producers charged their customers fell 0.9 percent - a 2.5 percent fall from the year earlier.

Producers benefited from lower petrol and diesel prices in the March quarter, which helped lower the costs to primary industries, and the construction and transport sectors.

The petroleum and coal product manufacturing industry saw its prices fall 19 percent, which is the biggest quarterly fall since December 2008.

Sheep, beef, and grain farmers also saw prices fall 11 percent, influenced by drought conditions and higher slaughter levels.

The prices received by meat and meat product manufacturers fell 2.4 percent, while prices paid to dairy cattle farmers were down 4.6 percent, due to lower farm-gate milk prices.

Dairy product manufacturers were also hit by lower export prices, down 5.2 percent.

In contrast, the construction industry saw prices rise 0.6 percent, driven by higher prices for residential buildings.

The capital goods price index rose 2.8 percent in the March quarter, over the year earlier.

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