New House Construction Prices Push up CGPI

15 May 2007

New House Construction Prices Push up CGPI

The Capital Goods Price Index (CGPI) rose 0.4 percent in the March 2007 quarter, driven by higher construction prices of new houses, Statistics New Zealand said today. This is the lowest quarterly increase of the CGPI since the September 2003 quarter. In the year to the March 2007 quarter, the CGPI rose 3.7 percent.

The residential buildings index rose 1.0 percent in the March 2007 quarter, making the most significant upward contribution to the CGPI. The main reason for the increase was higher construction prices of new houses, and this was mainly driven by increasing prices for construction components and higher subcontractors’ charges. In the year to the March 2007 quarter, the residential buildings index rose 5.1 percent.

Another upward contribution to the CGPI came from the other construction index, which rose 0.4 percent. Increasing costs of concrete work, and of tubes and pipes of iron and steel, were the main contributors for the increase in the index this quarter. From the March 2006 quarter to the March 2007 quarter, the index rose 4.1 percent.

The transport equipment index fell 0.2 percent and was the only asset group that contributed a downward effect to the CGPI in March 2007 quarter. The falling prices of trailers and semi-trailers, which reflected the impact of the appreciated New Zealand dollar and competition, were the main drivers of the fall in the transport equipment index in the latest quarter.

Dallas Welch (Mrs)

Acting Government Statistician

ENDS

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