Source: Statistics New Zealand – Second consecutive quarterly fall for CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters.

“The fall in the March quarter CPI, which last happened in 2001, was caused by an 11 percent fall in petrol prices. Without petrol, the CPI rose 0.3 percent,” prices manager Chris Pike said.

The average price of a litre of 91 octane petrol in the March 2015 quarter was $1.79, compared with $2.00 in the previous quarter. By the end of the March quarter, petrol pump prices were 1.8 percent above the average price for the quarter. If petrol pump prices stay at their 17 April level for the remainder of the June 2015 quarter, petrol will have an upward contribution to the CPI for the June quarter.

Cigarette and tobacco prices rose 12 percent in the latest quarter, following an 11 percent rise in excise duty in January. The CPI less cigarettes and tobacco, fell 0.7 percent. The average price of a pack of 25 cigarettes was about $26.40 in the March 2015 quarter, compared with $23.30 in the December 2014 quarter.

Housing rentals rose 0.8 percent, with Canterbury up 1.2 percent and Auckland up 0.8 percent. Prices for newly built houses excluding land rose 0.8 percent nationally, with Auckland up 0.7 percent.

Annual increase in prices slows

The CPI increased 0.1 percent in the year to the March 2015 quarter. This is the smallest annual movement since the September 1999 quarter, when prices decreased 0.5 percent over the year.

The prices of tradable goods and services (which face foreign competition) decreased 2.8 percent in the year, with lower prices for petrol (down 15 percent) and for audio-visual and computing equipment (down 13 percent). Tradable prices are now at their lowest level since the June 2009 quarter, despite petrol prices now being 12 percent higher than they were in that quarter.

Non-tradable goods and services increased 2.3 percent, the lowest annual increase since the September 2012 quarter. The main contributor was cigarettes and tobacco prices (up 14 percent), influenced by the increase in excise duty in January 2015. Housing and household utility prices were up 3.0 percent in the year, with higher prices for newly built houses excluding land (up 5.0 percent), housing rentals (up 2.3 percent), and electricity (up 3.6 percent).

Excluding cigarettes and tobacco, the annual CPI decreased 0.2 percent; excluding petrol, the CPI increased 1.0 percent over the year.

The CPI measures the rate of price change of goods and services purchased by New Zealand households.

Authorised by Liz MacPherson, Government Statistician, 20 April 2015

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Selwyn Manning, BCS (Hons.) MCS (Hons.) is an investigative political journalist with 23 years media experience. He specializes in reportage and analysis of socioeconomics, politics, foreign affairs, and security/intelligence issues. Selwyn has extensive experience as a commentator and has provided live political analysis to a wide range of television and radio organizations broadcasting in New Zealand, Australia and globally including the BBC (Five Live, London) and BBC (World Service). He is currently a correspondent to Australia's FiveAA radio, and is a regular live-on-air panelist on Radio New Zealand's The Panel with broadcaster Jim Mora.