In March, prices from the ANZ Monthly Inflation Gauge for New Zealand rose 0.2%, in line with seasonal norms, while for the March quarter, prices from the gauge rose 1%. Rises in price were greatly restricted to the housing group, according to ANZ. March recorded another great increase in rising construction costs and dwelling rents. This indicates that concern regarding the inflationary landscape is present and needs to be closely monitored, added ANZ.
After excluding the housing group, the gauge showed a mild inflationary backdrop, with drop in monthly price in half of the eight groups in the gauge, noted ANZ. The number of drops in monthly prices somewhat exceeded monthly increases overall. Drop in monthly price appears to be because of seasonality, low competitive pressures and input costs and certain retreat from earlier sizable monthly increases, according to ANZ. Increases in price also seemed to be partially due to retreat from earlier drops or because of capacity and specific cost pressures, noted ANZ.
“Our Gauge points to mixed Q1 non-tradable inflation signals. Stripping out the impact of higher tobacco prices, tertiary fees and housing delivers a subdued 0.2% March quarterly rise, another three-year low for this time of year. Despite mixed signals and some demand-pull inflation signs, we still have a low inflation picture”, says ANZ.
