Producer prices have eased to their lowest quarterly growth in more than two years as global oil prices fell, demand for accommodation and discretionary spending reduced and labour shortages started to slow.
Figures from the Australian Bureau of Statistics on Friday reveal cafes, restaurants and takeaway food, building construction and heavy and civil engineering were the largest contributors to final demand — a measure of products and services with no further processing or work.
At 0.5 per cent, it’s the lowest quarterly growth since the March quarter of 2021. Final demand has not declined over a quarter since the three months to June 2020.
The June quarter figures also revealed some welcome relief for Perth’s beleaguered construction industry — it was the only capital to record a decline in house construction input costs, which were down by 0.3 per cent. Steel products nationally fell 5.4 per cent over the quarter.
Elsewhere, cost increases for concrete pushed heavy and civil engineering prices higher by 5.4 per cent over the year, while investor demand for gold meant metal ore mining prices were higher by 2.7 per cent.
There were overall price declines for the manufacturing sector, with potassium chloride price falls pushing the cost of making chemical products 6.7 per cent lower and the falling beef price pushing agriculture to manufacturing prices down by 2 per cent.
Professional services prices are still on the rise, led by legal and accounting services up by 3.6 per cent over the year and architectural, engineering and technical services up 2.6 per cent, but the pace of increases is lessening.
Transport and warehousing prices were lower as rail freight transport, postal and courier services and road freight transport prices fell. Airport operations and air transport prices were up 1.6 per cent as hikes absorbed during the pandemic were passed on.
Higher input and operating costs for hospitality providers pushed their prices up 1.8 per cent in the quarter and 5.5 per cent over the year.
In contrast, softer demand following the summer peak pushed accommodation services prices lower by 11.4 per cent.