Inflation and print - Hagop's commentary

The prospect of further rises in official interest rates has increased following the release of the September 2007 quarter inflation data by the Australian Bureau of Statistics (ABS).

According to the ABS inflation increased by 0.7 per cent during the September quarter to produce an annual inflation rate of 1.9 per cent.

In the printing, publishing and recorded media sector raw material prices were reported to have remained steady during the September quarter and were reported to have declined by 1.4 per cent during the year to September.

Output prices for the sector were reported to have risen by 0.6 per cent during the quarter and by a modest 0.7 per cent during the year to September.

At a more disaggregated level, output prices for the printing and services to printing sector fell by 0.3 per cent during September quarter and by 1.4 per cent during the year to September.

Printing Industries national policy and research manager, Hagop Tchamkertenian said that the prospects of an interest rate rise later on this year have risen following the release of the September 2007 quarter inflation data.

"The September quarter inflation data confirms the build up of inflationary pressures. While the headline outcome was good what ultimately influences the Reserve Bank, the underlying rate, came in above market expectations," he said.

"Following the release of the producer prices on Monday, we now have had two sets of economic data being released in the past two days confirming the build up of inflationary pressures.

"The prospects of an interest rate rise will be of concern for the printing and associated sectors as it may eventuate at a time when activity in the printing industry may have peaked."

Hagop said a strong Australian dollar was helping to keep inflation from being higher.

"The Australian currency traded 1.9 per cent higher against the United States dollar during the September 2007 quarter compared to the June 2007 quarter, and was 11.6 per cent higher when compared to September 2006 quarter," he said.