ADDITIONAL COMMENTARY


MANUFACTURING INDUSTRIES PRODUCER PRICE INDEXES

During the March quarter 2011, the prices paid by manufacturers for material inputs increased 4.4%, while the prices received for their outputs increased 2.5%. Through the year to March quarter 2011, prices of material inputs increased 8.3%, while prices received for outputs increased 3.9%.

Rises in the prices paid for products from agriculture (+8.8%), oil and gas extraction (+9.6%), primary metal and metal product manufacturing (+6.3%) and food product manufacturing (+8.2%) drove the increases in the cost of materials used in the manufacturing industries. Major contributors to these price rises were wool, milk, crude oil, precious metals and raw sugar. Partly offsetting these rises were falls in the prices paid for fish products (-10.3%).

The increase in prices received for produced articles primary to the manufacturing industries was mainly due to rises in the prices of outputs primary to petroleum and coal product manufacturing (+10.0%), basic non-ferrous metal manufacturing (+8.5%) and meat and meat product manufacturing (+5.3%). Major contributors to these price rises were automotive fuel, precious metal recovery and beef. Partly offsetting these rises were falls in the prices received for outputs primary to basic ferrous metal product manufacturing (-1.8%), grain mill and cereal production (-4.1%) and structural metal product manufacturing (-2.3%).

CONSTRUCTION INDUSTRIES PRODUCER PRICE INDEXES

MATERIALS USED IN HOUSE BUILDING

The price index of Materials used in house building increased by 0.1% in the March quarter 2011. This follows an increase of 0.6% in the December quarter 2010. The most significant contributors this quarter were rises in the prices paid for electrical equipment (+5.4%), other metal products (+0.3%), plumbing products (+0.8%) and ceramic products (+0.3%). Partly offsetting these rises were falls in the prices paid for timber, board and joinery (–0.8%) and steel products (–1.1%).

All capital cities except for Brisbane (–0.9%) increased in the March quarter 2011, with price rises ranging from Perth (+0.1%) to Hobart (+0.5%).

Through the year to March quarter 2011 the Materials used in house building price index increased by 2.1%. This increase was mainly attributed to rises in the prices paid for ceramic products (+6.8%), other metal products (+2.5%), timber, board and joinery (+1.7%), electrical equipment (+6.0%), concrete, cement and sand (+2.0%), plumbing products (+1.9%) and cement products (+3.2%). Partly offsetting these rises were falls in the prices paid for steel products (-2.2%).

SUBDIVISION 30 - BUILDING CONSTRUCTION

The price index of Subdivision 30 – Building construction recorded an increase of 0.3% for the March quarter 2011. This was driven by rises in the prices received for Class 3011 House construction (+0.9%) which was mainly driven by Victoria (+1.3%) and New South Wales (+1.0%). Partly offsetting these rises were falls in the prices paid for Class 3019 – Other residential building construction (–0.4%) and Class 3020 – Non–residential building construction (–0.3%)

Through the year to March quarter 2011 the price index of Subdivision 30 – Building construction recorded an increase of 2.3% driven by rises in the prices received for Class 3011 – House construction (+2.8%), Class 3019 – Other residential building construction (+1.3%) and Class 3020 – Non–residential building construction (+2.0%).

The price index for Class 3101 – Road and bridge construction recorded a price increase of 0.2% for the March quarter 2011 which was mainly driven by rises in the prices received for Queensland (+0.5%) and Victoria (+0.4%).

Through the year to March quarter 2011, Class 3101 – Road and bridge construction increased by 2.2%.

SERVICE INDUSTRIES PRODUCER PRICE INDEXES

DIVISION I – TRANSPORT, POSTAL AND WAREHOUSING

Division I – Transport, postal and warehousing recorded increases for the March quarter 2011 in the price indexes for Group 461 – Road freight transport (+1.3%), Group 471 – Rail freight transport (+1.9%) and Group 481 – Water freight transport (+3.2%).

DIVISION J – INFORMATION MEDIA AND TELECOMMUNICATIONS

Division J – Information media and telecommunications recorded increases for the March quarter 2011 in the price indexes for Group 541 – Newspaper, periodical, book and directory publishing (+0.1%) (driven by Class 5412 – Magazine and other periodical publishing (+0.2%) and Class 5413 – Book publishing (+0.7%)) and Group 592 – Data processing, web hosting and electronic information storage services (+0.3%) (driven by Class 5921 – Data processing and web hosting services (+0.4%)).

DIVISION L – RENTAL HIRING AND REAL ESTATE SERVICES

Division L – Rental, hiring and real estate services recorded increases for the March quarter 2011 in the price indexes for Group 672 – Real estate services (+1.5%) and Class 6712 – Non–residential property operators (+1.2%).

DIVISION M – PROFESSIONAL, SCIENTIFIC AND TECHNICAL SERVICES

Division M – Professional, scientific and technical services recorded increases for the March quarter 2011 in the price indexes for Group 695 – Market research and statistical services (+2.6%), Group 700 – Computer system design and related services (+1.6%), Group 691 – Scientific research services (+0.3%) and Group 693 – Legal and accounting services (+0.2%) (driven by Class 6932 – Accounting services (+0.6%)).

DIVISION N – ADMINISTRATIVE AND SUPPORT SERVICES

Division N – Administrative and support services recorded increases for the March quarter 2011 in the price indexes for Group 721 – Employment services (+2.2%) (driven by Class 7212 – Labour supply services (+2.5%)) and Group 729 – Other administrative services (+0.3%) (driven by Class 7299 – Other administrative services n.e.c. (+1.0%)).

DIVISION O – PUBLIC ADMINISTRATION AND SAFETY

Division O – Public administration and safety recorded an increase for the March quarter 2011 in the price index for Class 7712 – Investigation and security services (+2.9%).

DIVISION S – OTHER SERVICES

Division S – Other services recorded an increase for the March quarter 2011 in the price index for Class 9533 – Parking services (+2.6%).