Producer Price Indexes, Australia

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Contains a range of producer price indexes in the Australian economy, comprising mining, manufacturing, construction and services industries.

The Australian PPIs measure the price change of products (goods and services) as they leave the place of production or as they enter the production process. This price change is measured from the perspective of the industries that produce goods and services. Whereas other measures, such as the Consumer Price Index (CPI), measure price change from the consumers perspective.

Jan Qtr 22 to Mar Qtr 22, Rose 1.6% during quarter.

Mar Qtr 22 to Jun Qtr 22, Rose 1.4% during quarter.

The main contributors to quarterly growth in Final demand were:

• Output of building construction (+3.9%), driven by continuing supply constraints for timber and metals, high freight costs and labour shortages.

• Petroleum refining and petroleum fuel manufacturing (+31.5%) due to a decrease in global crude oil supplies and increased demand in response to easing COVID19 restrictions.

• Heavy and civil engineering construction (+2.8%), due to increases in diesel and material prices coupled with skilled trade shortages and high freight costs.

The annual rise of 5.6% in Final demand to June 2022 is the strongest increase since December 2008.

Input prices to the house construction industry rose 4.3%

Input prices to house construction rose 4.3% this quarter, primarily due to timber and other metals, driven by supply shortages and strong demand. Suppliers are passing through more of the price increases as ongoing supply constraints of building materials is unable to meet demand across house construction.

Over the past twelve months, Input prices to house construction rose 17.3%, due to; Timber, board and joinery (+24.2%) and Other metal products (+18.4%)

Input prices to house construction rose in line with rising costs and increased demand for building materials. The main contributors were:

• Timber, board and joinery (+7.0%), driven by timber windows (+14.7%), due to ongoing supply constraints for timber, and strong freight prices.

• Other metal products (+3.9%), driven by aluminium windows and doors (+4.9%), due to increased raw material prices, tight supply and strong global demand.

• Other materials (+2.8%), driven by insulation (+8.4%), due to price rises for insulation materials, global production disruptions and strong freight prices.

House construction prices rose 6.0%

House construction prices rose 6.0% this quarter, recording the strongest rise since the start of the series in 1996. Increases in prices of building materials were driven by rising freight costs while tightened supply for timber and metals is causing project delays. Shortages for skilled trades is placing further pressure on labour costs. Victoria recorded its strongest rise since the start of the series as builders continue to reduce bonus offers and raise base prices.

Note: Sea freight charges have reduced substantially since June. Steel prices have abated since June. Labour should not be adding increases as the labour market softens. Gas prices in WA now has ‘lowest gas prices in developed world’

Input to the coal mining industry rose 3.8%

Input prices to manufacturing rose 3.1% over the quarter and rose 17.7% over the past twelve months.

Output prices of the manufacturing industries rose 5.1% over the quarter and 18.1% over the past twelve months.

The main contributors to Output price rises to the manufacturing industries were:

• Petroleum refining and petroleum fuel manufacturing (+31.1%), due to a continuing global fuel shortage with trade sanctions against Russia disrupting supply.

• Alumina production (+15.7%), due to rises in costs for bauxite, caustic soda and coal, combined with increased demand from China.

• Copper, silver, lead and zinc smelting (+7.8%), due to tight zinc supply put under further pressure as high energy costs in Europe disrupts production.

Offsetting the rise, was a price fall in:

• Aluminium smelting (-7.9%), coming off a strong increase in the March quarter and falling demand in China due to COVID lockdowns.

Gas Prices relatively unchanged due to WA governments gas pricing initiatives.
A lot of the costs in the Restart Study are associated in the mining and retreating of the existing Leach Pads. The big ticket 1 off items are the electrical equipment at $19.9m and $25.8m Mechanical Equipment.
Some people here expecting huge increases in pricing from the Restart Study in March. That is simply not the case as the above quarter on quarter stats indicate.