Decline in milk and power prices reduced input prices of New Zealand farms, factories and other producers for commodities and services during the third quarter. The recent figures released by Statistics New Zealand in Wellington today claimed 1.1 per cent decline in business running costs in 3rd-quarter against the previous quarter.

Payment for milk by companies, measured once in a year, declined 21 percent during the quarter, reporting a seven year high fall. Higher inflows to hydro storage lakes and cheaper natural gas proved very beneficial for industry as prices paid by power companies declined 8.2 percent in the third quarter.

Prices received by dairy farmers and dairy companies reported downfall of 24 per cent and 11 per cent respectively. The price index for the capital goods also reported a decline of 0.4 per cent during the quarter ended September 30.

Westpac Bank's senior economist, Doug Steel, said that it is the reflection of slow economic growth and weakening of NZ dollar. Mr. Steel added, "The recession that we have had has meant that prices, both on the input and output sides, have been falling. Demand has been weak, and that's coming through in lower prices."