The CGPI rose 1.4 percent in the September 2008 quarter and 3.8 percent in the year to the September 2008 quarter. While the residential building index continues to drive the increases, it is starting to ease. Pressures are moving now to the non-building and other construction, along with plant, machinery & equipment.

Exchange rates are placing upward pressure on prices, with the New Zealand dollar falling against all our major trading partners.

All six asset groups in the CGPI rose on the quarter. The most significant upward contributions came from the residential building index (up 1.4 percent) followed by the plant, machinery and equipment index (up 1.1 percent). Driving prices up on the quarter were increased costs for constructing new houses, higher supplier prices for furniture, and increased prices for agriculture and forestry equipment.

On the year, prices have increased in all asset groups. The land improvements index rose 12.2 percent on the year, the largest annual increase since the series began in 1989.

Although the residential buildings index rose 4.4 percent on the year, it is easing. It is down from 4.8 percent in the previous year and 5.7 percent two years earlier.

Non residential buildings and construction continue to rise. The non-residential buildings index is up 4.0 percent this year, compared to 1.7 percent last year; while the other construction index is up 5.7 percent this year compared to 3.7 percent the previous year. The plant, machinery & equipment index is up 3.1 percent after an increase of 0.3 percent in the previous year.