As has been the case across other areas of the economy, the transport industry showed some re-emergence of cost pressures in the March 2025 quarter. Repairs and maintenance costs jumped 4.8% over the quarter to be 14% higher than a year ago, which was the fastest rate of increase since 2022. A 1.7% quarterly increase in costs for tyre and vehicle parts also points towards increased costs for transport operators to keep their vehicles on the road. Other overheads (covering a wide range of ancillary business inputs) also rose 2.8% over the quarter, recording their largest increase since our series began in 2009.

Although diesel prices jumped 4.3% over the quarter, fuel costs are still 5.4% lower than in the March 2024 quarter. Diesel prices have been trending downwards again since the end of January, when import tariffs began to be announced by the US, undermining expectations for global growth and future international demand for oil. Most of the rise in domestic diesel prices captured in the March 2025 quarterly data has now been reversed, and international Brent oil prices in early May fell to their lowest level since March 2021. However, the effect on pump prices has been dampened by the weak New Zealand dollar, which is 16% lower against the US dollar than it was four years ago.

The most relief for transport operators in the March quarter came from a 6.0% fall in finance costs. Finance costs are now down 15% from a year ago and at their lowest level since 2022. Weakness in the labour market also meant that labour costs were subdued, with a 0.3% quarterly rise the smallest lift since 2020.

Uncertainty around the global outlook is likely to delay or moderate the anticipated recovery in demand conditions in the New Zealand economy over the next year. Although this trend might also be expected to limit cost increases, pockets of lingering inflationary pressures in the domestic economy, along with a relatively weak exchange rate, could still present some cost challenges for transport operators.

Infometrics prepares a customisable road transport cost index for National Road Carriers every quarter. The quarterly cost index tool updates give NRC trucking operator members timely information to plan and better manage their businesses. NRC members can log onto www.natroad.co.nz to enter their cost inputs into the cost index tool to see the impact of economic changes on their specific business.