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Consumers Price Index: September 2016 quarter – corrected
Embargoed until 10:45am  –  07 November 2016
Commentary

We republished Consumers Price Index: September 2016 quarter on 7 November 2016 to correct a manual processing error that affected the September 2016 quarter index numbers.

See Corrections for details.

September quarter inflation rate 0.3 percent

See the 'Downloads' box for a one-page detailed summary of this quarter's consumers price index (CPI), and the interactive CPI visualisation tool to explore the latest price changes.

The CPI rose 0.3 percent in the September 2016 quarter, following a 0.4 percent rise in the June 2016 quarter. Higher housing-related costs and vegetable prices were countered by lower prices for transport and fruit.

 

Housing-related costs rose in the September 2016 quarter.

  • Purchase of new housing, excluding land rose 2.0 percent nationally, with rises of 2.2 percent in Auckland and 0.8 percent in Canterbury.
  • Local authority rates rose 3.0 percent, compared with a 5.7 percent rise in the September 2015 quarter. Local authorities set their rates annually, and these are mainly shown in the September quarter's CPI. This is the lowest increase in rates recorded in a September quarter since 2002. 
  • Rentals for housing rose 0.4 percent, with Auckland up 0.7 percent and Canterbury down 0.3 percent.

The housing rents increase of 0.4 percent in the latest quarter is lower than the previous six quarters, which recorded increases of 0.6 to 0.8 percent. However, despite being lower overall, the September 2016 quarter CPI Rent Survey showed the highest proportion of rent increases since the March 2008 quarter.

Vegetable prices made the largest upward contribution (up 16 percent), influenced by seasonally higher prices for tomatoes and lettuce. After seasonal adjustment, vegetable prices rose 0.5 percent.

Prices for household contents and services rose 2.3 percent, influenced by less discounting on appliances and furniture and furnishings.  

Domestic airfares rose 5.2 percent this quarter, following two consecutive falls earlier in the year. Package holiday prices also rose, influenced by price increases in Asian markets.

The rises for vegetables and housing-related costs were partly offset by lower transport group prices.
  • Other private transport services (down 14 percent) made the most-significant downward contribution. Lower vehicle relicensing fees from 1 July 2016, a result of lower ACC levies for light vehicles, influenced the fall.
  • International air transport fell 5.9 percent, following a 2.3 percent rise in June 2016. Increased discounting and competition on international routes both contributed.
  • Petrol prices fell 1.7 percent in the September 2016 quarter, following a 5.3 percent rise in the June 2016 quarter. The average price of 1 litre of 91 octane petrol was $1.75 in the September 2016 quarter, down from $1.78 in the June 2016 quarter.

 

Fruit prices fell, (down 11 percent), influenced by lower avocado prices.

Tradable prices show no quarterly change

Tradables showed no change in the September 2016 quarter, with lower prices for fruit and transport costs. International air fares and petrol have fallen with lower international oil prices and a stronger New Zealand dollar. These falls were partly offset by higher prices for vegetables.

Non-tradables rose 0.5 percent in the latest quarter, with higher prices for housing-related costs and domestic air fares. The purchase of new housing, excluding land; local authority rates; and rentals for housing all increased. These were partly offset by lower prices for other private transport services.

The following graph shows the index points contribution to the CPI of items that rose or fell in price for each quarter (see also table 13 available from the 'Downloads' box).

Index points contribution

Annual inflation rate 0.4 percent

In the year to the September 2016 quarter, the CPI increased 0.4 percent. This follows 0.4 percent increases in the year to both the June and March 2016 quarters.

Housing-related prices were the main upward contributor, influenced by:

  • purchase of newly built houses, excluding land (up 6.3 percent); with Auckland up 7.9 percent 
  • rentals for housing (up 2.1 percent); with Auckland up 3.4 percent
  • local authority rates (up 3.4 percent)
  • property maintenance services (up 3.1 percent).

The 7.9 percent increase in purchase of new housing, excluding land for Auckland is the largest annual increase since a record 8.5 percent annual increase in September 2015. The 3.1 percent rise in property maintenance prices reflects consistent quarterly increases throughout the year for services such as plumbing and painting.

The increases to housing-related prices were partly offset by lower transport group prices influenced by:

  • petrol prices (down 11 percent)
  • international air transport (down 11 percent)
  • other private transport services (down 13 percent).

Package holiday prices also decreased, down 13 percent in the year to September 2016.

Tradeables decreased 2.1 percent in the year to September 2016. Lower prices for petrol, package holidays, international air fares, and purchase of new cars made the main downward contributions.

Non-tradables increased 2.4 percent in the year to the September 2016 quarter. The purchase of new housing, excluding land made the most significant upwards contribution, followed by cigarettes and tobacco, and housing rentals. The increases were partly offset by other private transport services. 

 

See CPI tradables and non-tradables visualisation tool for further information.

Underlying price change shows higher overall increase

The trimmed mean measures – which exclude extreme price rises and falls – had quarterly changes that showed a 0.4 percent increase in the September 2016 quarter across all trims. This indicates the ‘underlying’ price change (excluding extreme price rises and falls) was higher overall for both the quarter and the year.

 

Table 3.03 of the attached Excel tables shows selected groupings in the year to the September 2016 quarter.

  • CPI excluding housing and household utilities group decreased 0.5 percent.
  • CPI excluding transport group increased 1.4 percent.

The 'non-tradables less central and local government charges and cigarettes and tobacco subgroup' measure, which aims to reflect price change excluding direct government influence, rose 2.3 percent for the year. Central and local government charges rose 1.0 percent from the September 2015 quarter.

See CPI visualisation – an interactive tool to help you explore the changes in the prices and relative importance of the goods and services in the CPI basket.

For more detailed data on the CPI see the Excel tables in the ‘Downloads’ box.

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