What Is Capital Goods Price Index?

Capital Goods Price Index (CGPI) is an official statistical monitor of changes in fixed capital asset prices in New Zealand. The index tracks the change in costs for capital assets, which are used by companies and the New Zealand government to produce other goods. It is part of the country's overall Business Price Index and one of the main indices for inflation measurement in the economy, which helps to guide monetary policy. The CGPI is produced every quarter.

Understanding the Capital Goods Price Index (CGPI)

Prepared by Stats NZ, a government bureau, CGPI indicates changes in the cost of six types of physical capital assets:

  • residential buildings including houses and apartment complexes
  • nonresidential buildings including factories, office buildings, warehouses, and shopping malls
  • transportation equipment including commercial road and rail vehicles
  • land improvement costs including land clearing, reclamation, irrigation and drainage
  • plant machinery and equipment
  • other types of construction including infrastructure projects

CGPI is a constituent of New Zealand's Business Price Index along with indices related to producer prices, farm prices, salaries and wages, and consumer goods and services prices. CGPI publication was discontinued in 2015 as a single headline number after being wrapped into the Business Price Index, which is a broader indicator of price changes in the economy. However, CGPI is still broken down in a subsection of the Business Price Index.

There is no direct corresponding index in the U.S. with New Zealand's CGPI. Instead, the Producer Price Index (PPI) captures two similar components for capital goods: "materials and components for construction" and "materials and components for manufacturing."