New Zealand's Producer Prices remained flat in the three months ending June after two quarters of deflation, following a quarter which saw the largest magnitude in wholesale cost declines since the data began being recorded in 1976. On a yearly basis, input costs fell 1.2%, the first of such cost declines in more than five years. The quarterly data comes during a period in which commodities, as indicated by the S&P Goldman Sachs Commodity Index (SPGSCI) surged 25.6% following a quarter which saw the index remain flat. The interesting fact is that the SPGSCI plummeted 44% in the final three months of 2008. Thus it seems that there is a lag of about three months in the effect that commodity prices have on the cost that producers pay for raw materials.
BUSINESS
