Market volatility shows in fluctuating price index By ALDWIN R. FAJARDO

Volatility of the local economy has been manifested in the fluctuating mark-up prices of basic commodities with the 1999 third quarter index for the five major sectors posting a slight increase after taking a significant drop last year.

Analysts stem down the third quarter price index increase to the closure of more than 2,000 business establishments in the Northern Marianas which paved the way for lesser competition and higher retail prices.

Consumers are faced with costly products when there is lesser competition in the market. The closure of too many establishments may lead to monopoly, especially when the number of businesses in a particular field of business is trimmed down further.

Normally, fewer businesses that are able to survive a crisis dictate prices on the market, leaving the consumers at the losing end since there will be no other place to go to compare prices with.

The overall third quarter price index of 268.5 registered a 1.7 index point increase compared with the previous year’s third quarter tally recorded at 268.3 despite the drop in food, housing and health & recreation costs.

Increase in the transportation pushed the overall consumer price index up for the third quarter of 1999, a weighted price survey released by the Central Statistics Division of the Department of Commerce revealed.

The average price for the third quarter in the food group dropped by 2.0 percent from the 1998 tally of 209.9 to 205.8 last year.

The housing sector registered a whooping 5.1 percent increase from 213.0 to 223.8. Figure during the second quarter last year was recorded to have reached 224.6.

The apparel & upkeep group was stagnant at 216.9 during the first three quarters of last year.

In the transportation sector, the statistics division of the Department of Commerce reported a 5.9 index point increase from the previous quarter’s 320.8 to the end-September’s 331.9, although it is lower by 0.3 percent when compared with the same period tally at 332.8 in 1998.

And as the result of the post-implementation of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the health & recreation group registered a 5.9 percent increase from 519.7 in 1998 to 550.2 last year.

The consumer price index of the Northern Marianas was contrived from the 1977 Consumer Expenditure Survey which enabled the construction of baskets of consumer items.