Stats NZ has a new website.

For new releases go to

As we transition to our new site, you'll still find some Stats NZ information here on this archive site.

  • Share this page to Facebook
  • Share this page to Twitter
  • Share this page to Google+
Price Index News: October 2012

1. Short stories

Telegrams to tweets – tracking communication in the CPI

From smoke signals to social media, communication over distance has long been both important and evolving. Telegrams to tweets – tracking communication in the CPI looks at the changing nature and price of communication methods tracked by Statistics NZ for the consumers price index (CPI).

Delving into the clothes basket – tracking women’s and men's clothing in the CPI

Delving into the clothes basket – tracking women's and men's clothing in the CPI looks at different types of women’s and men’s clothing priced in the CPI basket, and some of the major price movements over time.

Understanding long-term movements in New Zealand's terms of trade

Understanding long-term movements in New Zealand's terms of trade outlines what the terms of trade is and why it's an important economic measure. Different ways of looking at movements in New Zealand’s merchandise terms of trade, a measure of the relative prices of exports and imports of goods, are also illustrated. A comparison is made between merchandise imports of Australian and Chinese-made goods and how the share of each has changed dramatically over the past 10 years.


2. Working with others

Purchasing power parities meeting in Ottawa

In September 2012, the Organisation for Economic Co-operation and Development (OECD) held a purchasing power parities (PPPs) meeting for non-European countries of the OECD.

Henry Minish from Statistics New Zealand's Prices unit attended this meeting in Ottawa, Canada. Representatives from statistical agencies of the non-European OECD countries also attended: the United States of America, Canada, Chile, Israel, Mexico, Japan, Korea, and Australia, as well as representatives of the World Bank, the OECD, and Russia.

Cross-country comparisons of economic data are often based on market exchange rates. While the calculation is straightforward, the results can be misleading in particular analyses, such as those that relate to material well-being, consumption, or volumes of economic activity. For meaningful comparisons, PPPs are needed. PPPs are the rates of currency conversion that equalise the purchasing power of different currencies by eliminating the differences in price levels between countries. In their simplest form, PPPs are simply price relatives that show the ratio of the prices in national currencies of the same good or service in different countries. The major use of PPPs is as a first step in making inter-country comparisons in real terms of gross domestic product (GDP) and its component expenditures.

The OECD calculates PPPs for its member countries every three years. The agenda for this meeting covered the preliminary results from the 2011 calculation round, and what is required to complete this round. As part of this process, countries reviewed the consistency of the price data supplied to date, and explained how they identified which priced items were representative of items purchased in their countries. Participants also reviewed a new method for calculating PPPs for health-related goods and services.

Looking forward to the 2014 PPP round, most attendees indicated they could meet the proposed collection schedule. The food and beverage collection for the 2014 round is due to take place in October 2012. The meeting provided the non-European countries with the opportunity to discuss any issues with collecting prices for the PPP programme. Participants also had an opportunity to present and discuss their methods of price collection and validation of results.

The meeting included discussion on the progress of the 2011 International Comparison Programme (ICP), which involves over 150 countries. The ICP is a worldwide statistical partnership to collect comparative price data and compile detailed expenditure values of countries’ gross domestic products, and to estimate the PPPs of the world’s economies.

The meeting gave Statistics NZ the opportunity to discuss the PPP programme with other non-European countries' representatives, and with OECD representatives, with the aim of contributing to improving the programme.

New Zealand is one of 54 countries participating in the OECD-Eurostat PPP programme. The programme publishes results for three-yearly benchmark years. The most recent benchmark is the 2008 year. Detailed 2008 benchmark results are available on the OECD.Stat website.


3. Virtual papers

Speaking out at New Zealand Association of Economists' conference

Frances Krsinich, from Statistics NZ's Prices unit, presented a paper at the 2012 New Zealand Association of Economists' conference, held in Palmerston North from 27 to 29 June.

The treatment of new and disappearing items in rolling year GEKS price indexes: evidence from New Zealand scanner data outlines an extension of the recently proposed rolling year 'GEKS' method for producing price indexes from scanner data. The extension estimates and incorporates price movements that correspond to new and disappearing specifications of products, by incorporating hedonic regression techniques.

We applied this method to New Zealand consumer electronics scanner data and compared it with other approaches. The results show that not accounting for the price movements of new and disappearing specifications may lead to an upward bias in the price measurement of consumer electronics.


4. Nuts and bolts

How credit services fit into the CPI

The credit services subgroup of the consumers price index (CPI) had an expenditure weight of 0.49 percent at the June 2011 quarter. The sources and methods used to compile this subgroup are explained in How credit services fit into the CPI.


5. On the horizon

Local authority rates in the CPI

The CPI Local Authority Rates Survey is conducted annually in the September quarter, for a sample of territorial authorities and regional councils. Rates are surveyed once a year because local authorities usually strike their rates annually. While normally any rate changes come into effect from 1 July, not all territorial authorities and regional councils set rates during the September quarter. The small number of rates struck after the September quarter, combined with the timing of survey returns and processing, result in rates changes being shown in both the September and December quarter CPIs. For the past five years, between 80 and 90 percent of the weight in the sample of local authority rates has been included in the September quarter CPI.

More information on local authority rates is in the January 2011 Price Index News article Property rates and related services in the CPI.

Alcohol excise duty increase

The annual indexation adjustment of the excise duty on alcoholic drinks occurred on 1 July 2012. The adjustment was a 1.48 percent increase in the excise duty, based on the movement in the 'CPI less credit services' index from the March 2011 quarter to the March 2012 quarter.

The effect on retail prices should show fully in the CPI for the September 2012 quarter, depending on the timing of price increases in pubs, clubs, restaurants, and liquor stores, and the timing of price collection by Statistics NZ staff.

Increases within the CPI ‘other private transport services’

The consumers price index (CPI) ‘other private transport services’ class contains such services as vehicle relicensing, driver licensing, warrants of fitness, road user charges, parking services, and driving tuition.

Road user charges for a private motor car, administered by the NZ Transport Agency, increased by 8.3 percent (or $3.69 per 1,000km) on 1 August 2012. Transaction fees associated with the purchase of road user charges fell and will moderate this increase. The fuel excise duty on petrol also increased, by 2 cents per litre on 1 August 2012. Two-thirds of these price increases will be shown in the September 2012 quarter CPI.

Prices for new or additional class of driver licence fees, administered by the NZ Transport Agency, rose on 5 July 2012. These price increases will show in the September 2012 quarter CPI. Prices for driver licence renewal remained unchanged.


6. Development updates

Progress with the CPI rolling review of retail outlets

We are busy with our on-going rolling review of the retail outlets we visit for the consumers price index (CPI). Statistics NZ price collectors visit these retail outlets to gather price information.

The CPI basket items we track at retail outlets have been organised into eight review groups. The outlets we visit and the item pricing specifications will be reviewed for one group each quarter.
The eight review groups are:

  • clothing, footwear, and furniture
  • services, vehicles, and personal goods
  • sports and stationery
  • consumer electronics (annual review)
  • convenience stores
  • supermarkets: food
  • supermarkets: non-food
  • consumer electronics (annual review).

The July 2012 issue of Price Index News has more information on the scope of the review.

Changes made to the first review group (clothing, footwear, and furniture) will be implemented in Consumers Price Index: September 2012 quarter, to be released in October.

For the second review group, we reviewed the outlets visited for services, vehicles, and personal goods, for example jewellery and cosmetics. The sample of retail outlets we visit has been reallocated for the following items tracked in the CPI:

  • plastic storage containers – we are now visiting more supermarkets to better reflect the mix of outlets people buy these items from
  • vehicle parts and accessories – we are now visiting more non-chain retailers to better reflect market shares
  • cosmetics, toiletries, suitcases, and handbags – we are now visiting more specialist stores.

Price collection for DVD movie hire has also been expanded to include Blu-ray movie hire. Changes to this group will be implemented in Consumers Price Index: December 2012 quarter, to be released in January 2013.

For more information on the review, please contact:

Alan Bentley
04 931 4600


Reviewing the business price indexes

Statistics NZ is undertaking a rolling review of the business price indexes – the producers price index (PPI), the farm expenses price index (FEPI), and the capital goods price index. The review has two objectives: to maintain the relevance of these indexes and to collect commodity data for use in the national accounts.

We are surveying a sample of economically significant enterprises operating in New Zealand and collecting information from them on their supply and use of goods and services (commodities). We will use this information to balance the production and expenditure estimates of gross domestic product (GDP) within an input-output framework. Doing this requires us to compile tables that detail the supply and use of commodities by industry.

This commodity information by industry will also be used to establish lower-level weights for the business price indexes, which are used as deflators in producing a chain-volume measure of GDP.

We carried out the previous PPI redevelopment from 2004 to 2010. The new rolling review is the first to use the Australian and New Zealand Standard Industrial Classification 2006 (ANZSIC06). As part of the review, the ANZSIC06 industries are being prioritised. We are reviewing industries on six-year cycles for most of them, and on either three-year or 12-year cycles for the remaining industries. 

Currently, we are reviewing these industries:

  • primary metal and metal product manufacturing 
  • fabricated metal product manufacturing
  • printing
  • publishing
  • agriculture (including FEPI) 
  • electricity, gas, and water
  • telecommunication services
  • Internet service providers and data processing services
  • computer system design and related services
  • forestry and logging
  • aquaculture
  • fishing
  • hunting and trapping
  • agriculture, forestry, and fishing support services
  • petroleum and coal product manufacturing
  • basic chemical and basic polymer manufacturing
  • fertiliser and pesticide manufacturing
  • pharmaceutical, cleaning, and other chemical manufacturing
  • meat and meat product manufacturing
  • seafood processing
  • dairy product manufacturing
  • fruit, oil, cereal, and other food product manufacturing
  • beverage and tobacco product manufacturing
  • transport equipment manufacturing
  • electronic and electrical equipment manufacturing
  • machinery manufacturing.

For more information about the rolling business price index review, please contact:

Peter Campion
Wellington 04 931 4600

CPI advisory committee in 2013

Statistics NZ plans to convene a consumers price index (CPI) advisory committee. This committee will meet in March or April 2013 to undertake an independent review of the methods and practices used to compile the CPI, and to advise the Government Statistician on the CPI.

Statistics NZ recently asked the CPI user community to nominate people who could serve on the committee, which is likely to have six to eight members. Committee members will need to have the confidence of the wider community of CPI users and sufficient understanding of its uses to contribute effectively to the review process. 

In early 2013, background and discussion papers prepared by Statistics NZ for the committee will be available to the public on the Statistics NZ website ( We will call for public submissions at this time.

The previous CPI revision advisory committee met in June 2004, with its recommendations informing the 2006 CPI review. For the papers prepared for the committee, and the committee’s report (including 20 recommendations), see 2004 CPI Revision Advisory Committee.
For more information on the 2013 CPI advisory committee, please contact:

Peter Campion
Wellington 04 931 4600

New labour cost index regional construction series on Infoshare

After the September 2010 and February 2011 Canterbury earthquakes, there is interest in changes to salary and wage rates in the Canterbury construction industry. In response, we created six new regional analytical series from the existing labour cost index (LCI) sample. These series are now available on Infoshare (select the ‘work income and spending’ category, then choose ‘Labour Cost Index’), Statistics NZ’s time-series data tool. They are provisional and may be revised as the classification by region is refined.

The LCI is designed to measure changes in salary and wage rates at a national level and is not intended to provide accurate regional estimates. However, given ongoing interest in the impact of the Christchurch rebuild, we grouped surveyed positions in the construction industry into ‘Canterbury’ and ‘rest of New Zealand’. We based these classifications on the addresses of construction industry respondents, location information in job descriptions, and other information obtained from construction industry respondents. For the regional price indexes, we used the same occupational shares at the 1-digit Australian and New Zealand Standard Classification of Occupations (ANZSCO) level as we used to weight the national LCI construction industry series (based on the 2006 Census of Population and Dwellings).

Series references are:

LCIQ.SG53E9C – All salary and wage rates for the construction industry – Canterbury
LCIQ.SG53E9R – All salary and wage rates for the construction industry – rest of New Zealand
LCIQ.SG51E9C – Salary and ordinary time wage rates for the construction industry – Canterbury
LCIQ.SG51E9R – Salary and ordinary time wage rates for the construction industry – rest of New Zealand
LCIQ.SW512AE9C – Annual mean salary and ordinary time increase for the construction industry – Canterbury
LCIQ.SW512AE9R – Annual mean salary and ordinary time increase for the construction industry – rest of New Zealand.

These time series are also in the supplementary tables of the Labour Cost Index (Salary and Wage Rates): June 2012 quarter information release. For more information see Canterbury construction industry in this release.


7. Making contact

Producers price index review of scope and purpose

Statistics New Zealand is reviewing the scope and purpose of the producers price index (PPI). The PPI is a key economic indicator in most countries, including New Zealand.

PPIs are constructed as either output indexes, measuring change in the prices that producers receive for their outputs; or input indexes, measuring change in the prices that producers pay for their inputs.

The PPIs produced by Statistics NZ are used to support the calculation of volume estimates of gross domestic product (GDP) in New Zealand’s national accounts. They are also used as indicators of short-term inflationary trends, and in contract indexation clauses to reflect changes in costs or prices during the life of commercial contracts.

Statistics NZ has produced PPIs in essentially their current form for the past 30 years. Over this time, the indexes have been re-weighted and re-referenced a number of times.  However, the underlying conceptual basis and coverage have remained largely unchanged.

As part of Statistics NZ’s goal to deliver accessible, relevant, and timely statistics for all New Zealanders, an essential element is to ensure that the statistics we produce meet the needs of our users, where possible. A formal review in which we consult with our users will ensure we understand their needs.

Key issues to be covered in the review include:

  • principal purpose of the PPI
  • other uses of the PPI
  • scope of the PPI
  • what should be published
  • alternative approaches for measuring business inflation.

A discussion paper is being prepared by Statistics NZ. We will make it available to the public on our website ( shortly, and call for public submissions at that time.

For more information on the PPI review of scope and purpose, please contact:

Henry Minish
Wellington 04 931 4600


8. Release dates

Price index release calendar for the next three months

October 2012

Thu 11 Food Price Index: September 2012
Tue 16 Consumers Price Index: September 2012 quarter
 Fri    19   Labour Cost Index (All Labour Costs): June 2012 quarter

November 2012

Tue 6 M Labour Cost Index (Salary and Wage Rates): September 2012 quarter
Tue 13   Food Price Index: October 2012
Mon 19 M Producers Price Index: September 2012 quarter
Mon 19 M Capital Goods Price Index: September 2012 quarter

December 2012

Mon 3 M Overseas Trade Indexes (Prices): September 2012 quarter (provisional)
Mon 3 M Overseas Trade Indexes (Volumes): September 2012 quarter (provisional)
Thu 13 Food Price Index: November 2012

M= Media conference

This issue of Price Index News was released on Wednesday 10 October, 2012

  • Share this page to Facebook
  • Share this page to Twitter
  • Share this page to Google+
  • Share this page to Facebook
  • Share this page to Twitter
  • Share this page to Google+