Six things with wild price tags in 2023

This year is likely to be a year of volatile prices for food and household items. While the global outlook for the cost of goods remains cloudy, experts say some light at the end of tunnel is starting to gleam through for households that have been struggling with rising prices.

Here is a guide to where we could expect to see the most price movement this year.

Inflation on goods is expected to come off a lot faster than that of services.

ASB senior economist Mark Smith said shipping and freight costs had come down, as had global oil prices and therefore fuel prices. The outlook for fuel prices, however, remained volatile.

By the end of 2023, Smith said, it was widely thought that the inflation rate would have dropped to just over 5%, from the current rate of 7.2%

“There were a bunch of pressures all going one way last year, from a retail perspective everything was going up, but this year we are expecting to see a bit more differentiation and things won’t increase to the same extent and others items will come down.”

Potatoes:

Prices likely to increase Smith said food prices had yet to come off the burner to the extent analysts had hoped, and consumers would continue to be faced with price increases on a wide range of food this year. This included domestically grown and made produce and groceries, as well as imported goods.

Potatoes New Zealand’s chief executive Chris Claridge said potatoes were one of a number of vegetables set to increase in price in the weeks ahead and through the year.

Anything powered by a computer chip: Prices likely to increase

Covid-19 lockdowns and disruption caused by the previous and recent factory shut downs in China, South Korea and Taiwan has caused manufacturing delays. There has been a global computer chip shortage since 2021, which had caused an issue with supply for manufacturers and businesses using computer chips, including Ford, Cisco and retailers who sell consumer electronics.

Smartphones, consumer appliances: Prices likely to increase

Demand for consumer electronics and appliances has come back from what it was 12 months ago, off the back of declining consumer confidence, tightening credit and the fact many people replaced goods or bought new gear over the past few years, First Retail Group managing director Chris Wilkinson said. “All these goods are imported, and with freight and distribution costs remaining high, I don’t see these coming back [to earlier prices] any time soon.

Courgettes, other fresh Prices likely to increase produce:

A single courgette will set you back almost $2 at the moment, or $9 for a kilogram, and these prices are expected to creep higher.

Fresh fruit and vegetable prices are tipped to climb even higher this year, despite seasonal produce such as courgettes and lemons already being at new high prices.

Clothing and apparel: Prices to decrease

High oil prices had increased the cost of clothing, footwear and apparel but with the pressures now off, that was a good signal for retail prices, said Smith.

“With shipping increases coming lower globally, import prices will then be lower and retailers might have to discount to get the sales they need.”

Wood, building could decrease

likely

supplies: Prices

Building materials such as wood, framing, cladding, windows and fixings could reduce slightly in price through the year.

Smith said construction costs and materials prices were extremely elevated last year and had already started to come down. Acute labour shortages could also impact prices.