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New Zealand Q1 PPI Outputs Add 0.9%, Inputs Up 1.0%

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Output producer prices in New Zealand climbed 0.9 percent on quarter in the first quarter of 2014, Statistics New Zealand said on Monday.

The output PPI - prices received by New Zealand producers - topped forecasts for an increase of 0.7 percent following the 0.4 percent contraction in the fourth quarter.

Input prices - prices of goods and services used by New Zealand producers - climbed 1.0 percent on quarter, topping expectations for 0.4 percent after shedding 0.7 percent in the three months prior.

"The higher prices for electricity generation contributed to both the higher input and output PPIs in the latest quarter," prices manager Chris Pike said. "This often happens in March quarters, due to spot-market conditions and low lake levels."

The output electricity and gas supply price index rose 14 percent, which contributed more than half of the rise in the output PPI. The input electricity and gas supply price index (up 20 percent) contributed nearly three-quarters of the rise in the input PPI.

Higher prices for raw milk resulted in an increase in prices received by dairy cattle farmers (up 4.0 percent), and an increase in input prices paid by dairy product manufacturers (up 3.1 percent) in the latest quarter.

On a yearly basis, producer rice outputs climbed 4.0 percent after gaining 3.8 percent in Q1, while inputs added 3.1 percent after rising 2.8 percent in the previous three months.

On a yearly basis, the output electricity and gas supply price index rose 2.8 percent, while inputs rose 0.7 percent.

The prices received by the dairy cattle farming industry surged 47 percent, and the prices paid by the dairy product manufacturing industry spiked 39 percent.

Also on Monday, the bureau said that capital goods prices in New Zealand were up 0.6 percent on quarter in Q1.

The major upward contributions to the capital goods price index came from the residential buildings price index (up 1.1 percent), and the non-residential buildings price index (up 0.8 percent).

The gains were offset by a decrease in the price index for transport equipment (down 0.4 percent). The appreciating New Zealand dollar against most key currencies also influenced this price change.

On a yearly basis, the CGPI rose 2.1 percent. The increases for residential buildings (up 4.6 percent) and non-residential buildings (up 3.5 percent) were the highest since 2008, the bureau noted.

Finally, the Performance of Services Index came in with a score of 58.9 in April, up from the upwardly revised 58.5 in March (originally 58.3) - and accelerating above the line of 50 that separates expansion from contraction.

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