Annual inflation at 7.2 percent

The consumers price index increased 7.2 percent annually in the September 2022 quarter, Stats NZ said today.

The 7.2 percent increase follows an annual increase of 7.3 percent in the June 2022 quarter, and an annual increase of 6.9 percent in the March 2022 quarter.

The main driver for the 7.2 percent annual inflation to the September 2022 quarter was housing and household utilities due to rising prices for construction, rentals for housing, and local authority rates.

Prices for the construction of a new house increased 17 percent in the September 2022 quarter compared with the September 2021 quarter.

“The cost to construct a new house has continued to rise with supply-chain issues, labour costs, and higher demand, all of which combine to push up prices,” prices senior manager Nicola Growden said.

“The 17 percent annual increase in construction of a new house in the September quarter follows 18 percent annual increases in both the June and March 2022 quarters.”

Rental prices for housing had an annual increase of 4.6 percent in the September 2022 quarter. This follows an annual increase of 4.3 percent in the June 2022 quarter.

Local authority rates had an annual increase of 7.3 percent in September 2022 quarter. This compares with a 7.1 percent annual increase in the September 2021 quarter.

Rates are captured once a year in the September quarter, as this is when ratepayers see price changes set by councils.

How housing costs are measured in consumer price indexes at Stats NZ has more information on how housing is captured in the consumers price index.

After housing and household utilities, the next largest contributor to the annual increase was from the transport group, due to higher prices for petrol and diesel.

Petrol prices increased 19 percent in the year to the September 2022 quarter. Diesel prices increased 72 percent over the same period.

Quarterly inflation at 2.2 percent

The consumers price index rose 2.2 percent in the September 2022 quarter compared with the June 2022 quarter, mainly influenced by the food group and the housing and household utilities group.

In the September 2022 quarter, compared with the June 2022 quarter, vegetable prices rose 24 percent.

“This is the largest quarterly rise in vegetable prices since the series began in September 1999,” Growden said.

“Tomatoes, lettuce, and broccoli drove this rise in vegetable prices.”

Transport was also a main driver of the quarterly rise driven by international airfares. This was partly offset by a fall in petrol prices.

International airfares rose 20 percent in the September 2022 quarter compared with the June 2022 quarter. Annually, they fell 8.4 percent in the September 2022 quarter compared with the September 2021 quarter.

In 2020, Stats NZ reduced the weights of international and domestic airfares and overseas accommodation in response to reduced consumer spending due to COVID. Stats NZ has reviewed these weights every year since June 2020 to better reflect the continuing change in consumer spending, and in in 2022 increased the weights of international and domestic airfares and overseas accommodation as consumer spending in these areas has increased.

Price index methods – updates for the September 2022 quarter has more information on the reweight.

Prices for petrol fell for the first time since the June 2020 quarter. In the September 2022 quarter the price of 1 litre of 91 octane petrol fell 4.2 percent to $2.72 compared with $2.84 in the June 2022 quarter.

Diesel prices rose 2.5 percent to $2.64 in September 2022, compared with $2.57 in the June 2022 quarter.

Non-tradeable inflation highest since series began

Non-tradeable inflation was 6.6 percent in the year to September 2022 quarter, the highest since the series began in June 2000.

Construction of new dwellings, rentals for housing, and ready-to-eat food were the biggest contributors to the movement.

Non-tradeable inflation measures goods and services that do not face foreign competition. It is an indicator of domestic demand and supply conditions. However, the input materials of these goods and services can be influenced by foreign competition.

The tradeable inflation rate, which measures goods and services that are influenced by foreign markets, was at 8.1 percent in the year to the September 2022 quarter. This compares with an annual rise of 8.7 percent in the June 2022 quarter.

Higher prices for petrol, vegetables, and international air transport were the biggest contributors to the tradeable movement.

Inflation rates around the world are currently higher than in recent years, with the OECD average at 10.3 percent for the year ended August 2022. Australia was at 6.1 percent to the year ended June 2022. The United Kingdom was at 9.9 percent to the year ended August 2022, and the United States was at 8.2 percent to the year ended September 2022.