Production prices keep on rising

By: Troy Bilsborough


Australian businesses are continuing to pay more on the production line, after the latest producer price index (PPI) revealed a

Australian businesses are continuing to pay more on the production line, after the latest producer price index (PPI) revealed a 1 percent increase in costs for the June quarter.

The revised figure has been put down to a larger-than-expected drop in the price of imports (-1.0 percent), despite the price of domestically produced items rallying 1.4 percent.

The PPI has jumped 4.6 percent since this time last year.

Manufacturers were hit the hardest overall, with production costs rising 6.3 percent overall between March and June, while the prices they received for their outputs increased by 4.2 percent.

For the period to June 2007, prices of material inputs have skyrocketed 15.8 percent, while prices for manufacturers' outputs only managed an increase of 8.7 percent.

The transport (freight) and storage industries index increased by 2.0 percent in the June quarter 2008, and 4.6 percent through the year.

The most significant contributors to the quarterly increase were road freight transport (2.1 percent), rail transport (7.5 percent) and coastal water transport (7.1 percent).

These increases were partially offset by decreases in international sea transport (-2.3 percent).

The price index for materials used in house building rose by 1.5 percent, while prices in the general construction industry increased by 1.6 percent. Property and business services industries increased by 1.1 percent in June, and 7.0 percent through the year.

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