BPI data collection March 2020

This BPI release includes the March 2020 quarter PPI, CGPI, and FEPI data. Response rates for March 2020 quarter Key firms Achieved: 99.4 percent Target: 100 percent Non-key firms Achieved: 94.1 percent Target: 96 percent Commodity review We are continuing our rolling review of the business price indexes. 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, to collect information on their supply and use of goods and services (commodities). We use this commodity information (by industry) to update lower-level weights for the business price indexes. We use these indexes as deflators in producing a chain-volume measure of GDP. Annual update of weights After implementing the Australian and New Zealand Standard Industrial Classification 2006 (ANZSIC06) in the March 2011 quarter, we update the producers price index (PPI) industry and commodity weights annually. We source the weights from the supply and use tables (SUT) produced annually as part of the New Zealand System of National Accounts. The weights associated with the commodities, and the weights attached to each industry, are therefore annually chain-linked. This reflects changes in economy-wide income and expenditure in the mix of products and the mix of industries. The new weights introduced in the March 2020 quarter are generally sourced from the 2017/18 SUT and expressed in the prices of the December 2019 quarter. We are using these weights to weight price movements from the December 2019 quarter to the March, June, September, and December 2020 quarters. Revisions We have incorporated several revisions to dairy and timber components in this release. The revisions reflect updated data that impacts historical results. They affect the PPI from the September 2019 and December 2019 quarters. Higher level indexes (PPI inputs and outputs 'All Industries') are also affected. These revisions will be incorporated in Gross domestic product: March 2020 quarter (which will have a minor impact on inventories series in the expenditure measure of GDP, and to Wood and Paper Product Manufacturing in the production measure of GDP). Exchange rates The New Zealand dollar depreciated against one key currency (UK pound) and appreciated against four key currencies (US dollar, Australian dollar, Japanese yen, and the Euro) when comparing the mid-point of the March 2020 and December 2019 quarters. An appreciating NZ dollar has a downward influence on the prices New Zealand producers pay for imported goods and services, and the prices received for exports. When calculating the PPI and CGPI, we generally use prices collected on the 15th day of the middle month in the quarter to represent the entire quarter. When these prices are collected in foreign currencies, they are converted to NZ dollars using the exchange rate at the mid-point of the quarter. The table below shows changes in the value of the NZ dollar in foreign currency denominations, from the mid-point of the December 2019 quarter to the mid-point of the March 2020 quarter. Exchange rates Bank selling rates for NZ$1.00 USA (NZ$:US$) UK (NZ$:pound) Australia (NZ$:AUS$) Japan (NZ$:yen) Europe (NZ$:euro) 15 November 2019 0.6251 0.4853 0.9214 67.7226 0.5671 15 February 2020 0.6319 0.4841 0.9396 69.3911 0.5827 Percentage change 1.1 -0.2 2.0 2.5 2.8 Source: Westpac Banking Corporation For a limited number of prices (e.g. petroleum product manufacturing) we use quarterly average prices. For these prices, the relevant exchange-rate movements are based on the average exchange rate for the quarter. en-NZ