ADDITIONAL COMMENTARY


MANUFACTURING INDUSTRIES PRODUCER PRICE INDEXES

During the December quarter 2010, the prices paid by manufacturers for material inputs increased 0.2%, while the prices they received for their outputs increased 0.4%. Through the year to December quarter 2010, prices of material inputs increased 5.5%, while prices they received for outputs increased 3.8%.

Price increases for products from metal ore mining (+1.3%), electricity supply (+4.2%), food product manufacturing (+1.3%) and machinery and equipment manufacturing (+1.6%) drove the rise in the cost of materials used in the manufacturing industries. Major contributors to these price rises were silver and zinc ores, electricity, sugar, raw and refined and bearings and parts. Partly offsetting these price rises were falls in the prices paid for agriculture (-0.8%).

The increase in prices received for produced articles primary to the manufacturing industries was mainly due to rises in the prices of outputs primary to basic non-ferrous metal manufacturing (+4.3%) and sugar and confectionery manufacturing (+8.1%). Major contributors to these price rises were precious metal recovery and raw sugar. Partly offsetting these price rises were falls in the prices received for outputs primary to basic chemical manufacturing (-6.2%), and motor vehicle and motor vehicle part manufacturing (-1.7%).

CONSTRUCTION INDUSTRIES PRODUCER PRICE INDEXES

MATERIALS USED IN HOUSE BUILDING

The price index of Materials used in house building increased 0.6% in the December quarter 2010. This follows an increase of 0.4% in the September quarter 2010. The most significant contributors this quarter were rises in the prices paid for ceramic products (+2.0%), timber, board and joinery (+0.9%), other metal products (+0.7%), and concrete, cement and sand (+0.7%).

All capital cities increased in the December quarter 2010 with price rises ranging from Melbourne (+0.4%) to Adelaide (+1.1%).

Through the year to December quarter 2010 the Materials used in house building price index increased 2.4%. This increase was mainly attributed to rises in the prices paid for timber, board and joinery (+3.2%), ceramic products (+6.6%), other metal products (+2.9%), other materials (+0.7%) and cement products (+2.7%). Partly offsetting these price rises were falls in the prices paid for steel products (-3.0%).

SELECTED OUTPUT OF DIVISION E - CONSTRUCTION

The price indexes of selected output of Division E - Construction includes Subdivision 30 - Building construction recorded an increase of 0.8% for the December quarter 2010.

This was driven by rises in the prices received for Class 3019 - Other residential building construction (+0.5%), which was mainly influenced by Victoria (+1.3%), Class 3020 - Non-residential building construction (+0.8%) and Class 3011 - House construction (+0.8%).

Through the year to December quarter 2010 the price index of Subdivision 30 - Building construction recorded an increase of 2.7% driven by rises in the prices received for Class 3011 - House construction (+2.8%), Class 3019 - Other residential building construction (+2.2%) and Class 3020 - Non-residential building construction (+2.7%).

The price index for Class 3101 - Road and bridge construction recorded a price increase of 0.8% for the December quarter 2010 which was mainly driven by the rises in the prices received for Victoria (+3.1%) and New South Wales (+0.5%).

Through the year to December quarter 2010, Class 3101 - Road and bridge construction increased 2.3%.

SERVICE INDUSTRIES PRODUCER PRICE INDEXES

SELECTED OUTPUT OF DIVISION I - TRANSPORT, POSTAL AND WAREHOUSING

The price indexes of selected services primary to Division I - Transport, postal and warehousing recorded price decreases for the December quarter 2010 in Group - 481 Water freight transport (-6.5%), driven by Class - 4810 Water freight transport (-6.5%) and Group - 471 Rail freight transport (-4.3%), driven by Class - 4710 Rail freight transport (-4.3%).

Within other price indexes of selected services primary to Division I - Transport, postal and warehousing increases were recorded in Group - 521 Water transport support services (+3.1%), driven by Class - 5219 Other water transport support services (+6.8%) and Group - 530 Warehousing and storage services (+1.7%), driven by Class - 5301 Grain storage services (+4.9%).


SELECTED OUTPUT OF DIVISION J - INFORMATION MEDIA AND TELECOMMUNICATIONS

The price indexes of selected services primary to Division J - Information media and telecommunication services recorded increases for the December quarter 2010. This was driven by rises in the prices received for Group 541 - Newspaper, periodical, book and directory publishing (+0.2%) driven by Class 5411 - Newspaper publishing (+0.3%) and Class 5412 - Magazine and other periodical publishing (+0.3%).

Within other price indexes of selected services primary to Division J - Information media and telecommunication services decreases were recorded in Group 592 - Data processing, web hosting and electronic information storage services (-0.2%) driven by Class 5922 - Electronic information storage services (-0.6%).


SELECTED OUTPUT OF DIVISION L - RENTAL HIRING AND REAL ESTATE SERVICES

The price indexes of selected services primary to Division L - Rental, hiring and real estate services recorded increases for the December quarter 2010. This was driven by rises in the prices received for Subdivision 66 - Rental and hiring services (except real estate) (+2.0%) driven by Group 661- Motor vehicle and transport equipment rental and hiring (+3.1%) and Group 663 - Other goods and equipment rental and hiring (+1.4%). Also showing increases were rises in the prices received for Class 6712 - Non-Residential property operators (+0.3%) and Group 672 - Real estate services (+0.1%).


SELECTED OUTPUT OF DIVISION M - PROFESSIONAL, SCIENTIFIC AND TECHNICAL SERVICES

The price indexes of selected services primary to Division M - Professional, scientific and technical services recorded price increases for the December 2010 quarter. This was driven by rises in the prices received for Group 693 - Legal and accounting services (+1.1%) driven by Class 6932 - Accounting services (+2.2%), Group 692 - Architectural, engineering and technical services (+0.2%) driven by Class 6921 - Architectural services (+1.4%), and Group 700 - Computer system design and related services (+0.3%).


SELECTED OUTPUT OF DIVISION N - ADMINISTRATIVE AND SUPPORT SERVICES

The price indexes of selected services primary to Division N - Administrative and support services recorded price increases for the December quarter 2010. This was driven by rises in the prices received for Group 729 - Other administrative services (+0.6%) driven by Class 7299 - Other administrative services n.e.c (+2.1%) and Group 731 - Building cleaning, pest control and gardening services (+0.2%) driven by Class 7312 - Building pest control services (+1.5%).


SELECTED OUTPUT OF DIVISION O - PUBLIC ADMINISTRATION AND SAFETY

The price index of selected services primary to Division O - Public administration and safety recorded a price increase for the December quarter 2010. This was driven by rises in the prices received for Class - 7712 Investigation and security services (+0.4%).


SELECTED OUTPUT OF DIVISION S - OTHER SERVICES

The price index of selected services primary to Division S - Other services recorded a price increase for the December quarter 2010. This was driven by rises in the prices received for Class 9533 - Parking services (+7.7%).