6401.0 - Consumer Price Index, Australia, Sep 2017 Quality Declaration 
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 25/10/2017   
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MAIN CONTRIBUTORS TO CHANGE


CPI GROUPS

The discussion of the CPI groups below is ordered in terms of their absolute significance to the change in All groups index points for the quarter (see Tables 6 and 7). Unless otherwise stated, the analysis is in original terms.

Weighted average of eight capital cities, Percentage change from previous quarter
Graph: Weighted average of eight capital cities, Percentage change from previous quarter



HOUSING GROUP (+1.9%)

The main contributors to the rise in the housing group this quarter are electricity (+8.9%), new dwelling purchase by owner-occupiers (+0.8%), gas and other household fuels (+5.2%) and property rates and charges (+2.6%). The rise in electricity is due to higher wholesale prices. The rise in new dwelling purchase by owner-occupiers is driven by increases in input prices being flowed through following a pick up in demand. The rise in gas and other household fuels is driven by increases in wholesale prices.

Over the last twelve months, the housing group rose 3.3%. The main contributors to the rise are new dwelling purchase by owner-occupiers (+3.1%) and electricity (+11.5%).

In seasonally adjusted terms, the housing group rose 0.9% this quarter. The main contributors to the rise is electricity (+4.6%) and new dwellings purchase by owner-occupiers (+0.8%).


Utilities Sub-Group

September quarter 2017

Electricity, gas and water price increases in the utilities sub-group was 6.8% this quarter, driven by rises in electricity (+8.9%), gas and other household fuels (+5.2%); and water and sewerage (+3.2%). Rises in electricity and gas are due to rises in wholesale prices. For further information on wholesale gas prices in the domestic market, see the forthcoming Producer Price Index feature article 'Introducing the producer price indexes, domestic gas extraction series' in Producer Price Indexes, Australia, Sep 2017 (cat. no. 6427.0), to be released on 27 October 2017.

The most significant quarterly rises in utilities were observed in Adelaide (+14.2%), driven by electricity; followed by Canberra (+12.3%), driven by gas; Perth (+7.5%), driven by electricity; and Brisbane (+3.5%), driven by electricity. Rises this quarter are mainly driven by increases in wholesale prices. Increases in wholesale prices have been observed across the National Electricity Market (NEM).

For the current CPI series, the utilities sub-group has a weight of 3.61% to the All groups CPI, of which electricity made up 1.99%, gas and other household fuels 0.72%, and water and sewerage 0.90%.

Weighting patterns for all expenditure classes in the CPI will be updated in the December quarter 2017. For further information, please refer to the forthcoming information paper 'Introduction of the 17th series Australian Consumer Price Index' (cat. no. 6470.0.55.001), to be released on 6 November 2017.

June quarter 2014 to September quarter 2017

The period from June quarter 2014 to September quarter 2017 commences with the removal of carbon pricing. For this period the utilities sub-group rose 9.3%. This was driven by gas and other household fuels (+12.7%), followed by electricity (+10.8%) and water and sewerage (+2.9%).

Household utilities price indexes - June quarter 2014 to September quarter 2017
Graph: Household utilities price index numbers—June quarter 2014 to September quarter 2017


Looking speficially between the period June quarter 2014 and June quarter 2016, utilities prices have been falling, on average 0.9%(footnote 1) annually compared to the All groups CPI which has been rising 1.5% (JQ14-JQ16(footnote 2) ). The fall was driven by electricity (-2.6%) and is due to the removal of carbon pricing as well as the Australian Energy Regulator's decision to lower network charges for some States and Territories.

From September quarter 2016 to September quarter 2017, utilities prices have, on average, increased 5.1% annually compared to the All groups CPI which has been rising 1.8% (SQ16-SQ17). Rises in utilities during this period are driven by electricity (+7.9%) and are due to increases in wholesale prices.


ALCOHOL AND TOBACCO GROUP (+2.2%)

The main contributor to the rise in the alcohol and tobacco group this quarter is tobacco (+4.1%). The rise in tobacco is due to the effects of the 12.5% federal excise tax increase effective from 1 September 2017.

Over the last twelve months, the alcohol and tobacco group increased 7.0%. The main contributor to the rise is tobacco (+14.1%).

In seasonally adjusted terms, the alcohol and tobacco group rose 2.3% this quarter. The main contributor to the rise is tobacco (+4.5%).


RECREATION AND CULTURE GROUP (+1.3%)

The main contributor to the rise in the recreation and culture group this quarter is international holiday travel and accommodation (+4.1%). The rise in international holiday travel and accommodation is typical of the summer peak seasons in Europe and America.

Over the last twelve months, the recreation and culture group rose 0.6%. The main contributors to the rise are domestic holiday travel and accommodation (+2.0%) and sports participation (+3.8%). The rise is partially offset by audio, visual and computing equipment (-7.0%) and international holiday travel and accommodation (-1.6%).

In the CPI, airfares and accommodation are collected in advance (at the time of payment), but are only used in the CPI in the quarter in which the trip is undertaken. International airfares are collected two months in advance (July for travel in September) and domestic airfares are collected one month in advance (August for travel in September).

In seasonally adjusted terms, the recreation and culture group rose 0.5% this quarter. The main contributor to the rise is audio, visual and computing media and services (+3.9%).


FOOD AND NON-ALCOHOLIC BEVERAGES GROUP (-0.9%)

The main contributor to the fall in the food and non-alcoholic beverages group this quarter is vegetables (-10.9%). Favourable growing conditions has provided an increase in the supply of vegetables having a downward impact on prices.

Over the last twelve months, the food and non-alcoholic beverages group fell 0.7%. The main contributors to the fall are fruit (-10.3%) and vegetables (-6.5%).

In seasonally adjusted terms, the food and non-alcoholic beverages group fell 1.1%. this quarter. The main contributors to the fall are vegetables (-8.2%) and fruit (-7.1%).


COMMUNICATION GROUP (-1.4%)

The main contributor to the fall in the communication group this quarter is telecommunication equipment and services (-1.5%).

Over the last twelve months, the communication group fell 2.9%. The main contributor to the fall is telecommunication equipment and services (-3.2%).

The communication group is not seasonally adjusted.


CLOTHING AND FOOTWEAR GROUP (-0.9%)

The main contributors to the fall in the clothing and footwear group this quarter are garments for women (-1.2%), garments for men (-2.1%) and accessories (-0.7%) as a result of sustained periods of specialling in the retail industry.

Over the last twelve months, the clothing and footwear group fell 3.2%. The main contributor to the fall is garments for women (-4.6%).

In seasonally adjusted terms, the clothing and footwear group fell 0.9% this quarter. The main contributors to the fall are garments for men (-1.9%) and accessories (-1.5%).


INSURANCE AND FINANCIAL SERVICES GROUP (+0.6%)

The main contributor to the rise in the insurance and financial services group this quarter is insurance (+1.9%).

Over the last twelve months, the insurance and financial services group rose 1.8%. The main contributor to the rise is insurance (+3.7%).

In seasonally adjusted terms, the insurance and financial services group rose 0.5% this quarter. The main contributor to the rise is insurance (+1.6%).


FURNISHINGS, HOUSEHOLD EQUIPMENT AND SERVICES GROUP (+0.4%)

The main contributors to the rise in the furnishings, household equipment and services group this quarter is child care (+2.2%).

Over the last twelve months, the furnishings, household equipment and services group fell 0.8%. The main contributor to the fall is furniture (-3.8%).

In seasonally adjusted terms, the furnishings, household equipment and services group fell 0.1% this quarter.


HEALTH GROUP (-0.2%)

The main contributor to the fall in the health group this quarter is pharmaceutical products (-0.8%) and medical and hospital services (-0.1%). The fall is due to the cyclical effect of a greater proportion of patients who qualify for subsidies under the Pharmaceutical Benefits Scheme (PBS) and Medicare Benefits Scheme (MBS) which reduces the out-of-pocket expense.

Over the last twelve months, the health group rose 3.9%. The main contributor to the rise is medical and hospital services (+5.4%).

In seasonally adjusted terms, the health group rose 1.0% this quarter. The main contributor to the rise is medical and hospital services (+1.3%).


TRANSPORT GROUP (0.0%)

Transport group recorded no movement in September quarter 2017. Automotive fuel fell 2.3% for the quarter with all fuel types recording falls this quarter. Automotive fuel fell in July (-4.4%) and rose in August (+2.5%) and September (+2.3%). The fall is partially offset by rises in other services in respect of motor vehicles (+2.7%).

The following graph shows the pattern of the average daily prices for unleaded petrol for the eight capital cities over the last fifteen months.

AVERAGE PRICE OF UNLEADED PETROL (91 OCTANE), cents per litre
Graph: AVERAGE PRICE OF UNLEADED PETROL (91 OCTANE), cents per litre


Over the last twelve months, the transport group rose 2.7%. The main contributor to the rise is automotive fuel (+7.5%).

In seasonally adjusted terms, the transport group fell -0.3% this quarter. The main contributor to the fall is automotive fuel (-2.3%).


EDUCATION GROUP (0.0%)

The education group recorded no change this quarter.

Over the last twelve months, the education group rose 3.1%. The main contributor to the rise is secondary education (+4.1%).

In seasonally adjusted terms, the education group rose 1.1% this quarter. The main contributors to the rise are secondary education (+1.2%) and tertiary education (+1.1%).


INTERNATIONAL TRADE EXPOSURE - TRADABLES AND NON-TRADABLES

The tradables component (see Table 8) of the All groups CPI fell 0.3% this quarter. Price changes for the goods and services in this component are largely determined on the world market. The tradables component represents approximately 35% of the weight of the CPI. The tradable goods component recorded a fall of 0.6% this quarter. The most significant negative contributors are vegetables( -10.9%) and automotive fuel (-2.3%). The tradable services component recorded a rise of 3.9% this quarter. The most significant positive contributor is international holiday travel and accommodation (+4.1%).

The non-tradables component of the All groups CPI rose 1.0% this quarter. Price changes for the goods and services in this component are largely determined by domestic price pressures. The non-tradables component represents approximately 65% of the weight of the CPI. The most significant contributors to the 2.0% rise in the non-tradable goods component are electricity (+8.9%) and tobacco (+4.1%). The rise in the non-tradable services component of 0.5% is driven by other services in respect of motor vehicles (+2.7%) and property rates and charges (+2.6%).

Over the last twelve months, the tradables component fell 0.9% and the non-tradables component rose 3.2%. This compares to a rise of 0.4% and 2.7% respectively over the twelve months to the June quarter 2017.

In seasonally adjusted terms, the tradables component of the All groups CPI fell 0.8% this quarter, while the non-tradables component rose 0.9%.

A detailed description of which expenditure classes are classified as tradable and non-tradable in the 16th series is shown in the Appendix of the December quarter 2016 issue of Consumer Price Index, Australia (cat. no 6401.0).


SEASONALLY ADJUSTED ANALYTICAL SERIES

The All groups CPI seasonally adjusted rose 0.4% this quarter, compared to the original All groups CPI which recorded a rise of 0.6%.

The trimmed mean rose 0.4% this quarter, compared to a rise of 0.5% in the June quarter 2017. Over the last twelve months, the trimmed mean rose 1.8%, compared to a rise of 1.8% over the twelve months to the June quarter 2017.

The weighted median rose 0.3% this quarter, compared to a revised rise of 0.6% in the June quarter 2017. Over the last twelve months, the weighted median rose 1.9%, compared to a revised rise of 1.9% over the twelve months to the June quarter 2017.

ORIGINAL
SEASONALLY ADJUSTED
Jun Qtr 2017 to Sep Qtr 2017
Jun Qtr 2017 to Sep Qtr 2017
%
%

All groups CPI
0.6
0.4
Food and non-alcoholic beverages
-0.9
-1.1
Alcohol and tobacco
2.2
2.3
Clothing and footwear
-0.9
-0.9
Housing
1.9
0.9
Furnishings, household equipment and services
0.4
-0.1
Health
-0.2
1.0
Transport
0.0
-0.3
Communication(a)
-1.4
-1.4
Recreation and culture
1.3
0.5
Education
0.0
1.1
Insurance and financial services
0.6
0.5
International trade exposure series
Tradables
-0.3
-0.8
Non-tradables
1.0
0.9

(a) not seasonally adjusted


A detailed explanation of the seasonal adjustment of the All Groups CPI and calculation of the trimmed mean and weighted median measures is available in Information Paper: Seasonal Adjustment of Consumer Price Indexes, 2011 (cat. no. 6401.0.55.003) available on the ABS website. Revisions to the seasonally adjusted estimates can be the result of the application of concurrent seasonal adjustment, described in paragraph 15 of the Explanatory Notes.

1 Compounding annual growth rates (CAGR) were used in the calculation of average annual growth. <back
2 This period excludes the introduction of carbon pricing and includes its subsequent removal. <back