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6427.0 - Producer Price Indexes, Australia, Mar 2006 (Reissue)  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 15/06/2006  Reissue
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This reissue contains amended data for the March Quarter 2006 (see "Changes in this Issue" below).

PRICE INDEXES AND CONTRACT PRICE INDEXATION


MARCH QUARTER KEY FIGURES

Dec Qtr 05 to Mar Qtr 06
Mar Qtr 05 to Mar Qtr 06
STAGE OF PRODUCTION
% change
% change

Final (Stage 3) commodities (excl. exports)
0.7
3.7
Domestic
0.7
4.1
Imports
0.2
1.4
Intermediate (Stage 2) commodities
1.5
6.8
Domestic
1.4
6.3
Imports
2.3
10.9
Preliminary (Stage 1) commodities
1.6
8.5
Domestic
1.5
7.5
Imports
2.2
15.8

Final Stage, Base: 1998-99 = 100.0
Graph: Final Stage, Base 1998-99 = 100.0

Final Stage, Quarterly % change
Graph: Final Stage, Quarterly % change



MARCH QUARTER KEY POINTS


FINAL (STAGE 3) COMMODITIES

  • The final (Stage 3) index rose 0.7% in the March quarter 2006.
  • The domestic component rose 0.7%, mainly due to increases in building construction, services to transport and other agriculture. These increases were partially offset by decreases in motor vehicle and parts manufacturing.
  • The imports component rose 0.2%, due to price increases for consumption goods, including other manufacturing and petroleum refining. Imports of capital goods decreased by -0.8%, due to lower prices for electronic equipment, which were partially offset by higher prices for industrial machinery.


INTERMEDIATE (STAGE 2) COMMODITIES
  • The intermediate (Stage 2) index rose 1.5% in the March quarter 2006.
  • The domestic component rose 1.4%, mainly due to increases in basic non-ferrous metal manufacturing, metal ore mining and other agriculture. These increases were partially offset by decreases in grain, sheep, beef and dairy farming, and legal and accounting services.
  • The imports component rose 2.3%, due to oil and gas extraction, petroleum refining, metal ore mining and electrical equipment manufacturing. These increases were partially offset by decreases in iron and steel manufacturing.


PRELIMINARY (STAGE 1) COMMODITIES
  • The preliminary (Stage 1) index rose 1.6% in the March quarter 2006.
  • The domestic component rose 1.5% mainly due to basic non-ferrous metal manufacturing, metal ore mining and oil and gas extraction. These increases were partially offset by decreases in grain, sheep, beef and dairy farming, and legal and accounting services.
  • The imports component rose 2.2%, due to oil and gas extraction and petroleum refining. These increases were partially offset by decreases in iron and steel manufacturing.


NOTES

FORTHCOMING ISSUES

ISSUE (QUARTER) Release Date
June 2006 24 July 2006
September 2006 23 October 2006



CHANGES IN THIS ISSUE

The ABS has reissued amended data for the March quarter 2006 import and export price indexes to correct for processing errors. The revisions to the international trade price indexes also affect several components of the producer price indexes (stage of production - all 3 stages, articles produced by manufacturing industries, materials used by manufacturing industries, and output of the general construction industry).


Together, the changes in the different indexes will cause revisions to the March quarter 2006 national accounts estimates, with the largest impact being on the volume of imports of goods and services. These revisions will be reflected in the June quarter 2006 issues of Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0) and Balance of Payments and International Investment Position, Australia (cat. no. 5302.0). The indexes enter into the compilation of the national accounts in many different ways, some of which offset. In isolation, the net effect of the revisions would cause the seasonally adjusted GDP chain volume measure of quarterly growth for March quarter 2006 to be revised from 0.9% to 0.8%. However, there will also be a range of other revisions to the national accounts estimates, for example those coming from updated source data. This means that the actual results published for GDP growth for March quarter 2006 in the June quarter 2006 Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0), to be released on 6 September 2006, may differ from the above.



RELATED STATISTICS

For more information about statistics in this publication contact Steve Whennan on Canberra (02) 6252 6251, or email <steve.whennan@abs.gov.au>.



INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Steve Whennan on Canberra (02) 6252 6251.



COMMENTARY


REVISIONS

The ABS has reissued amended data for the March quarter 2006 import and export price indexes to correct for processing errors. The revisions to the international trade price indexes also affect several components of the producer price indexes (stage of production - all 3 stages, articles produced by manufacturing industries, materials used by manufacturing industries, and output of the general construction industry). The following table summarises the effect of the revisions to the stage of production indexes.

Quarterly and Annual Movements as originally published for March Quarter 2006 and reissue

Dec Qtr 05 to Mar Qtr 06
Mar Qtr 05 to Mar Qtr 06
Original March publication
Reissued March publication
Original March publication
Reissued March publication
STAGE OF PRODUCTION
% change
% change
% change
% change

Final (Stage 3) commodities (excl. exports)
0.8
0.7
3.8
3.7
Imports
0.8
0.2
2.0
1.4
Intermediate (Stage 2) commodities
1.5
1.5
6.9
6.8
Imports
2.8
2.3
11.5
10.9
Preliminary (Stage 1) commodities
1.6
1.6
8.6
8.5
Imports
2.7
2.2
16.3
15.8



STAGE OF PRODUCTION OVERVIEW

Each of the three stage of production indexes increased in the March quarter 2006, with the preliminary (Stage 1) index showing the largest rise of 1.6%, followed by an increase of 1.5% for the intermediate (Stage 2) index, and an increase of 0.7% for the final (Stage 3) index. Through the year to March quarter 2006, the preliminary (Stage 1) index increased by 8.5%, compared with an increase of 6.8% for the intermediate (Stage 2) index and an increase of 3.7% for the final (Stage 3) index.


The increase of 0.7% in the final (Stage 3) index reflects an increase of 0.7% in the price of domestically produced items and an increase of 0.2% in the price of imported items. The domestic component increased due to price rises for building construction, services to transport, other agriculture, and electricity, gas and water supply, which were partially offset by decreases in motor vehicle and parts manufacturing. The imports component increased due to price rises for other manufacturing and petroleum refining, which were partially offset by decreases in electronic equipment.


The increase of 1.5% in the intermediate (Stage 2) index reflects an increase of 1.4% in the price of domestically produced items and an increase of 2.3% in the price of imported items. The domestic component increased due to price rises for basic non-ferrous metal manufacturing, metal ore mining, other agriculture and road freight transport services, which were partially offset by price decreases for grain, sheep, beef and dairy farming and legal and accounting services. The imports component increased due to price rises for oil and gas extraction, petroleum refining, metal ore mining and electrical equipment and household appliances manufacturing, which were partially offset by price falls for iron and steel manufacturing and electronic equipment manufacturing.


The increase of 1.6% in the preliminary (Stage 1) index reflects an increase of 1.5% in the price of domestically produced items and an increase of 2.2% in the price of imported items. The domestic component increased due to price rises for basic non-ferrous metal manufacturing and metal ore mining, which were partially offset by price decreases for grain, sheep, beef and dairy farming. The imports component increased due to price rises for oil and gas extraction and petroleum refining, which were partially offset by price falls for iron and steel manufacturing.

COMPARISON OF SOP INDEXES: Base: 1998-99 = 100.0
Graph: Comparison of SOP Indexes




MANUFACTURING INDUSTRIES PRODUCER PRICE INDEXES

During the March quarter 2006, the prices paid by manufacturers for their material inputs increased by 2.7%, while the prices they received for their outputs increased by 2.0%. The input price index increased by 15.0% through the year to March quarter 2006 and the output price index increased by 7.9% during the same period.


Increases in the price of crude oil (both domestic and imported), domestically sourced sugar, copper oxides, gold and lead ores and concentrates were the main contributors to the quarterly result for the materials used in manufacturing industries index. Price decreases for cattle and calves, flat rolled iron and steel and wheat provided some offset to these increases.


Higher prices for aluminium smelting and copper and alloy extruded products for export, alumina and diesel contributed to the bulk of the increase in the articles produced by manufacturing industries index for the March quarter 2006. These increases were partially offset by decreases in the prices of passenger motor vehicles and edible offal and tallow.

ARTICLES PRODUCED BY MANUFACTURING INDUSTRIES: All Groups, Quarterly % change
Graph: Articles Produced By Manufacturing Industries All Groups, Quarterly % change


Materials Used In Manufacturing Industries: All Groups, Quarterly % change
Graph: Materials Used In Manufacturing industries All Groups, Quarterly % change




CONSTRUCTION INDUSTRIES PRODUCER PRICE INDEXES

The price indexes for materials used in house building increased by 0.4% in the March quarter 2006, reflecting price increases for a range of materials. The most significant contributors to the increase were paint and other coatings, copper pipework and carpet. Offsetting price decreases were recorded for concrete roof tiles and timber doors. Increases were recorded in all of the state capitals, ranging from 0.2% in Sydney and Adelaide, to 0.8% in Perth.


Through the year to March quarter 2006, the materials used in the house building index rose 2.0%.

Materials Used in House Building: All Groups, Quarterly % change
Graph: Materials Used in House Building All Groups, Quarterly % change



The price index for the output of the general construction industry increased by 0.8% in the March quarter 2006, and by 4.0% through the year to March quarter 2006. Increases were registered in the quarter for all component industries, with the index for non-residential building construction being the largest contributor, followed by residential building construction other than houses, house construction and road and bridge construction.


Contributing to the movement in the general construction industry price indexes this quarter were increases in the costs of material and labour inputs. Materials using steel and concrete had the largest impact of the material inputs, combined with higher fuel costs. Increases in labour costs had a lesser effect this quarter than in the December quarter 2005.


Western Australia provided the greatest contribution to the increase in the price index for the output of the general construction industry this quarter, followed by Queensland and New South Wales.

Output of The General Construction Industry: All Groups, Quarterly % change
Graph: Output of the General Construction industry All Groups, Quarterly % change




SERVICE INDUSTRIES PRODUCER PRICE INDEXES

The property and business services industries price index increased by 0.3% in the March quarter 2006 and by 4.3% through the year to March quarter 2006. The property services price index increased by 1.0% this quarter with increases for real estate residential sales fees, office property operators, retail property operators and industrial property operators. Through the year to March quarter 2006 the property services index rose 5.3%.

Property and Business Services Industries: All Groups, Quarterly % change
Graph: Property and Business Services industries All Groups, Quarterly % change



The business services index fell -0.2% in the March quarter 2006 and rose by 3.7% through the year to March quarter 2006. The main contributors to the decrease were accounting services and general cleaning services.


The transport (freight) and storage industries index increased by 1.1% in the March quarter 2006. The most significant contributors with price increases were express road freight, bulk road freight and furniture removal. The most significant contributor with a price decrease was bulk rail freight. Through the year to March quarter 2006 the transport (freight) and storage industries index rose by 5.0%.

Transport (Freight) and Storage Industries: All Groups, Quarterly % change
Graph: Transport (Freight) and Storage industries All Groups, Quarterly % change


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