Building costs push capital prices up
The cost of residential building rose 0.8 per cent in the September quarter, helping push up the overall costs of buying new capital goods.
House construction costs are up 3 per cent in the past year, the fastest pace since 2008, according to Westpac Bank.
But building costs are rising in patches rather than across the board. For example, non-residential building costs were up just 0.5 per cent in the past year, Westpac said, though they were falling before the Canterbury earthquakes.
Civil construction, things like road works and water works, were up 3.3 per cent in the year and the pace looked to be trending up, Westpac said.
The greatest price pressures from the Canterbury rebuild were expected to come in labour costs, Westpac said.
Overall, the price new capital items rose 0.3 per cent in the September 2012 quarter, compared with the June 2012 quarter, Statistics New Zealand said.
The main factors pushing up the capital goods price index were, the residential buildings price index (up 0.8 per cent) civil construction (up 1.0 per cent) and transport equipment (up 0.6 per cent).
The rises in the September 2012 quarter were offset by a decrease in the price index for plant, machinery, and equipment (down 0.6 per cent), due largely to lower prices for computer machinery.
In the year to the September 2012 quarter, the CGPI rose 1.3 per cent. The CGPI measures the change in the purchase price of capital goods used by New Zealand producers.