ADDITIONAL COMMENTARY


MANUFACTURING INDUSTRIES PRODUCER PRICE INDEXES

During the September quarter 2009, the prices paid by manufacturers for material inputs decreased by 1.9%, while the prices received for outputs primary to the manufacturing industry increased by 0.9%. Through the year to September quarter 2009, prices of material inputs decreased by 16.0%. This is the largest annual decrease since the current series began in September quarter 1969. Through the year to September quarter 2009, the prices received for outputs decreased by 7.1%.

Price decreases for products from basic chemical and chemical product manufacturing (-14.5%), metal ore mining (-4.3%) and food product manufacturing (-9.2%) drove the decrease in the cost of materials used in the manufacturing industries. Major contributors to these price decreases were iron ore, black coal and other inorganic chemicals. Price increases for products from oil and gas extraction (+17.3%) and water and sewerage services (+22.2%) provided partial offsets to the price decreases.

The increase in prices received for produced articles primary to manufacturing industries was mainly due to rises in the prices of outputs from basic non-ferrous metal manufacturing (+8.8%), petroleum and coal product manufacturing (+6.4%) and bakery product manufacturing (+8.9%). Major contributors to these price increases were the recovery of nickel, zinc and copper, petroleum refining and petroleum fuel manufacturing, bread manufacturing (factory based) and motor vehicle manufacturing. These increases were partly offset by decreases in the prices received for basic ferrous metal manufacturing (-6.9%) and dairy product manufacturing (-2.5%).

CONSTRUCTION INDUSTRIES PRODUCER PRICE INDEXES

The price index for materials used in house building decreased by 0.8% in September quarter 2009, which is the first decrease in this index since the March quarter 2001. This follows consecutive increases of 0.4% in June quarter 2009, 1.3% in March quarter 2009 and 1.3% and in December quarter 2008. The most significant price falls were for steel products (-8.4%), plumbing products (-1.5%), concrete, cement and sand (-1.0%) and timber, board and joinery (-0.9%). These decreases were partially offset by a price rise in cement products (+1.3%) and other metal products (+0.6%).

Sydney (-2.1%) contributed the most to the overall weighted average of six capital cities quarterly movement, followed by Adelaide (-1.9%), Brisbane (-0.5%), Perth (-0.4%) and Melbourne (-0.1%). Hobart (+0.3%) was the only city that showed a positive percentage movement.

Through the year to September Quarter 2009 the materials used in house building price index rose by 2.3%. This rise was mainly attributed to increases of prices paid for other metal products (+5.3%), electrical equipment (+5.1%), cement products (+4.4%) and ceramic products (+4.3%). These increases were partially offset by a decrease in prices paid for steel products (-4.4%).

The main movements in the price indexes for selected outputs primary to Division E - Construction for the September quarter 2009 were increases in Subdivision 30 - Building construction (+0.1%), which was mainly driven by an increase in Class 3011 - House construction (+1.2%). This was partially offset by price falls in Class 3019 - Other residential building construction (-1.3%) and Class 3020 - Non-residential building construction (-0.8%). The overall increase in building construction was mainly influenced by increases in Victoria (+2.6%) and Tasmania (+3.8%). These increases were partially offset by decreases in Queensland (-1.7%) and NSW (-0.7%).

The price index for outputs primary to Class 3101 - Road and bridge construction increased by 0.8% in the September 2009 quarter which was driven by increases in NSW (+1.7%) and Victoria (+0.8%).

SERVICE INDUSTRIES PRODUCER PRICE INDEXES

SELECTED OUTPUT OF DIVISION I - TRANSPORT, POSTAL AND WAREHOUSING

The price indexes of selected output of services primary to Division I - Transport, postal and warehousing recorded price increases for the September quarter 2009 in Group 461 - Road freight transport (+0.8%), driven by general freight, Group 471 - Rail freight transport (+2.3%), driven by bulk transport, and Group 530 - Warehousing and storage services (+1.1%), driven by cold storage. This Division recorded price decreases for Group 481 - Water freight transport (-5.8%), driven by international sea freight.


SELECTED OUTPUT OF DIVISION J - INFORMATION MEDIA AND TELECOMMUNICATIONS

The price indexes for selected output of services primary to Division J - Information media and telecommunication services recorded a price increase for the September quarter 2009 in Group 541 - Newspaper, periodical, book and directory publishing (+0.8%), driven by newspaper advertising. This Division recorded a price decrease in Group 592 - Data processing, web hosting and electronic information storage services (-0.2%).


SELECTED OUTPUT OF DIVISION L - RENTAL, HIRING AND REAL ESTATE SERVICES

The price indexes of selected output of services primary to Division L - Rental, hiring and real estate services recorded price increases for the September quarter 2009 in Sub-division 66 - Rental and hiring services (except real estate) (+1.3%), driven by Group 661 - Motor vehicle and transport equipment rental and hiring (+1.9%), and Group 663 - Other goods and equipment rental and hiring (+0.9%).

This Division recorded price decreases for Class 6712 non-residential property operators (-2.9%), Group 672 - Real estate services (-1.0%) driven by real estate agents.


SELECTED OUTPUT OF DIVISION M - PROFESSIONAL, SCIENTIFIC AND TECHNICAL SERVICES

The price indexes of selected output of services primary to Division M - Professional, scientific and technical services recorded a price decrease for the September quarter 2009 in Group 700 - Computer system design and related services (-7.1%), driven by computer consultancy, and Group 693 - Legal and accounting services (-0.1%), driven by accounting services.

This Division recorded a price increase in Group 692 - Architectural, engineering and technical services (+0.1%), driven by engineering design and consultancy.


SELECTED OUTPUT OF DIVISION N - ADMINISTRATIVE AND SUPPORT SERVICES

The price indexes for selected output of services primary to Division N - Administrative and support services recorded a price increase for the September quarter 2009 in Group 721 - Employment services (+1.7%), driven by contract staff services, and Group 729 - Other administrative services (+1.3%), driven by credit rating and investigation.


SELECTED OUTPUT OF DIVISION O - PUBLIC ADMINISTRATION AND SAFETY

The price index for selected output of services primary to Division O - Public administration and safety recorded a price decrease for the September quarter 2009 Class - 7712 Investigation and security services (-2.6%), driven by security guards.


SELECTED OUTPUT OF DIVISION S - OTHER SERVICES

The price index for selected output of services primary to Division S - Other services recorded a price increase for the September quarter 2009 in Class 9533 - Parking services (+5.3%).