6470.0.55.002 - Information Paper: Introduction of the Consumer Price Index Weight Update, 2018
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 12/12/2018 First Issue
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First annual re-weighting of CPI to be introduced Households are spending a larger proportion of their expenditure on costs relating to housing and health and less on food and clothing according to the first annual re-weighting of the Consumer Price Index (CPI). Chief Economist for the Australian Bureau of Statistics (ABS), Bruce Hockman said: "The move to annually re-weighting the CPI is a significant enhancement that ensures the CPI is reflective of current household spending patterns, and remains accurate, contemporary and brings Australia into line with international best practice." The updated weights will be implemented in the December quarter publications of the CPI and the Selected Living Cost Indexes, scheduled to be released on 30 January 2019 and 6 February 2019 respectively. Background on the process for re-weighting and changes is contained in an information paper published today by the ABS entitled Introduction of the Consumer Price Index Weight Update, 2018. The 2018 updated CPI weights indicate that households have increased the proportion of their expenditure on Housing, Health and Alcohol and tobacco. Mr Hockman added: "Increases in expenditure on housing is due to a combination of increased construction activity in 2016-17 seeing more households purchasing new dwellings for owner occupier purposes and increased expenditure on utilities due to higher electricity prices in most capital cities. The updated weights also show households have decreased the proportion of their expenditure on food, clothing and household goods. This reflects the continuation of strong retail competition putting downward pressure on prices." CPI expenditure weights reflect household spending on goods and services and are calculated using information from a range of ABS surveys, the 2018 weight update has been primarily sourced from the 2016-17 Household Final Consumption Expenditure (HFCE) data available from the Australian System of National Accounts, 2017-18 (ABS cat. no. 5204.0). Further information is available in Information Paper: Introduction of the Consumer Price Index Weight Update, 2018 (ABS cat. no. 6470.0.55.002) available from the ABS website: https://www.abs.gov.au.
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