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6427.0 - Producer Price Indexes, Australia, Mar 2007  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 23/04/2007   
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Note: 18 May 2007
The ABS has reissued amended data for Table 48, the price index of materials used in building, other than house building, special series, Perth, for the periods September 2004 through March 2007.

The ABS is revising this series due to an error introduced when the series was linked to Table 42 (see September 2005 edition of Producer Price Indexes, ABS cat. no. 6427.0)

The change to the series is an increase in the September quarter 2004 index number from 134.7 to 138.0 (2.4%). This correction flows through to all subsequent periods, such that the March 2007 index number is revised from 158.0 to 162.0 (2.5%).

The correction substantially revises the price index movement from June 2004 to September 2004. Some of the movements for subsequent quarters have been subject to minor revisions.

This error affects no other ABS price indexes.


PRICE INDEXES AND CONTRACT PRICE INDEXATION

MARCH QUARTER 2007 KEY FIGURES

Dec Qtr 06 to Mar Qtr 07
Mar Qtr 06 to Mar Qtr 07
STAGE OF PRODUCTION
% change
% change

Final (Stage 3) commodities (excl. exports)
0.0
2.8
Domestic
0.1
3.8
Imports
-1.1
-2.8
Intermediate (Stage 2) commodities
0.3
4.6
Domestic
0.7
5.5
Imports
-1.8
-1.3
Preliminary (Stage 1) commodities
0.1
4.5
Domestic
0.5
5.4
Imports
-2.3
-1.8

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 2007 KEY POINTS


FINAL (STAGE 3) COMMODITIES

  • The final (Stage 3) index remained unchanged in the March quarter 2007.
  • The domestic component rose 0.1%, mainly due to price increases in building construction and other manufacturing. Partially offsetting these were decreases in other agriculture (bananas) and motor vehicles & parts.
  • The imports component fell by 1.1%, due to price decreases for electronic equipment, industrial machinery, photographic and scientific equipment and tobacco products.


INTERMEDIATE (STAGE 2) COMMODITIES
  • The intermediate (Stage 2) index rose 0.3% in the March quarter 2007.
  • The domestic component rose 0.7%, mainly due to price increases for grain, sheep, beef & dairy cattle products, property operator and developers, some components of other agriculture, other business services & business management services. Partially offsetting these increases were decreases in prices for basic non-ferrous metals (smelted or refined) and metal ores.
  • The imports component decreased 1.8%, due to prices falls for oil, fabricated metal products, petroleum, non-ferrous basic metals (shaped), electronic equipment and plastic products.


PRELIMINARY (STAGE 1) COMMODITIES
  • The preliminary (Stage 1) index rose 0.1% in the March quarter 2007.
  • The domestic component rose 0.5% mainly due to price increases for property operator and developers, grain, sheep, beef & dairy cattle products, some components of other agriculture, other business services & business management services. Partially offsetting these were decreases in basic non-ferrous metals (smelted or refined) and metal ores.
  • The imports component decreased 2.3%, due to price falls for oil, non-ferrous basic metals (shaped), and petroleum. Iron and steel partially offset these decreases.


NOTES

FORTHCOMING ISSUES

ISSUE (QUARTER) Release Date
June 2007 23 July 2007
September 2007 22 October 2007



CHANGES IN THIS ISSUE

There are no changes in this issue.



RELATED STATISTICS

For more information about statistics in this publication contact Lee Taylor on Canberra (02) 6252 6251, or email <lee.taylor@abs.gov.au>.



INQUIRIES

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



SUMMARY COMMENTARY


STAGE OF PRODUCTION OVERVIEW

The final (stage 3) stage of production producer price index remained unchanged in the March quarter 2007. The intermediate index (Stage 2) increased by 0.3% with an increase of 0.1% for the preliminary (Stage 1) index. Through the year to March quarter 2007, the final (Stage 3) index increased by 2.8%, the intermediate (Stage 2) index increased by 4.6% and the preliminary (Stage 1) index increased by 4.5%.


The overall zero change in the final (Stage 3) index reflects an increase of 0.1% in the price of domestically produced items, offset by a fall of 1.1% in the price of imported items. The domestic component increased due to price rises for building construction and other manufacturing. These were partially offset by decreases in some components of other agriculture (bananas) and motor vehicles and parts. The imports component decreased due mainly to price falls for electronic equipment, industrial machinery, photographic and scientific equipment and tobacco products.


The increase of 0.3% in the intermediate (Stage 2) index reflects an increase of 0.7% in the price of domestically produced items and a decrease of 1.8% in the price of imported items. The domestic component increased due to price rises for the products of grain, sheep, beef & dairy cattle farming, property operator and developers, some components of other agriculture and other business services. These were partially offset by price decreases for basic non-ferrous metals (smelted or refined) and metal ores. The imports component decreased due to price falls for oil, fabricated metal products, petroleum, non-ferrous basic metals (shaped), electronic equipment, plastic products, photographic and scientific equipment and textiles. These decreases were partially offset by price increases for iron and steel.


The increase of 0.1% in the preliminary (Stage 1) index reflects an increase of 0.5% in the price of domestically produced items and a decrease of 2.3% in the price of imported items. The domestic component increased due to price rises for property operators and developers, grain, sheep, beef & dairy cattle farming, some components of other agriculture and other business services. These rises were partially offset by price decreases for basic non-ferrous metals (smelted or refined) and metal ores. The imports component decreased due to price falls for oil, non-ferrous basic metals (shaped), petroleum refining, fabricated metal products, basic non-ferrous metals (smelted or refined), plastic products and electronic equipment. These decreases were partially offset by price rises for iron and steel.

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




MANUFACTURING INDUSTRIES PRODUCER PRICE INDEXES

During the March quarter 2007, the prices paid by manufacturers for material inputs increased by 0.1%, while the prices they received for their outputs decreased by 0.3%. The input price index increased by 3.6% through the year to March quarter 2007 and the output price index for the same period increased by 3.8%.


Price rises in domestic crude oil, flat rolled products of iron and steel, cattle and calves, nickel ores and concentrates and whole milk were recorded for the materials used in manufacturing industries. Price decreases for imported crude oil, copper oxides and iron ore mining provided offsets to the price increases. The increase in the price of domestic crude oil was affected by weather conditions interrupting domestic supply of crude oil, while crude oil in the international market fell.


Lower prices received for refined petroleum products, non-ferrous basic metal products (shaped) and smelted copper, silver, lead and zinc were the significant contributors to the decrease in the articles produced by the manufacturing industries index for the March quarter 2007. These decreases were partially offset by increases in the prices of basic non-ferrous metals (smelted or refined), aluminium smelting and tobacco.

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 index for materials used in house building increased by 0.5% in the March quarter 2007, following a 0.7% increase in the December quarter 2006. The most significant increases were recorded for structural timbers, windows, trusses and frames and clay bricks. These increases were partially offset by falls in the price of pipework and electrical installations. The price index of materials used in house building in Adelaide fell by 0.2%, whereas the other capital cities recorded increases, ranging from 0.3% increases in Melbourne and Brisbane to a 1.2% increase in Hobart.


Through the year to March quarter 2007 the materials used in house building price index rose by 3.7%

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 0.9% in the March quarter 2007 and by 4.2% through the year to March quarter 2007. Increases were reported in the quarter for all component industries, with the index for house construction the largest contributor, followed by non-residential construction, residential building construction other than houses, and road and bridge construction.


Labour costs were a major factor in price increases across the country this quarter. Increased demand for construction in Victoria, Queensland and Western Australia also put upward pressure on prices. A change in government regulations in Queensland contributed to the increase in the index for house construction for that State.


Victoria and Queensland provided the largest positive contributions to the increase in the price index for the output of the general construction industry in the March quarter 2007. There was a second consecutive small negative contribution from New South Wales, where price increases in house construction and road and bridge construction were offset by falls in non-residential construction and residential building other than houses.

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 & business services industries price index increased by 1.4% in the March quarter 2007 and by 6.9% through the year to March quarter 2007. The property services price index increased by 2.1% this quarter with price increases for real estate agents and commercial property operators. Through the year to March quarter 2007 the property services index rose by 9.5%.

PROPERTY AND BUSINESS SERVICES INDUSTRIES, All groups: Quarterly % change
Graph: Property and Business Services industries All Groups, Quarterly % change



The business services index increased by 1.0% in the March quarter 2007 and by 5.3% through the year to March quarter 2007. The main contributors to the increase came from contract staff services and consultant engineering services.


The transport (freight) and storage industries index decreased by 0.2% in the March quarter 2007. The most significant contributors with price decreases were for services to water transport, international sea transport and stevedoring services. The most significant contributors with price increases were road freight transport, parking services and pipeline transport services. Through the year to March quarter 2007 the transport (freight) and storage industries index rose by 1.4%.

TRANSPORT (FREIGHT) AND STORAGE INDUSTRIES, All groups: Quarterly % change
Graph: Transport (Freight) and Storage industries All Groups, Quarterly % change


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