In October, the prices of the General Industry changed, on average, 0.10% in comparison to September, a lower result than that between September and August (0.47%). The cumulative index in the year reached -0.36% and, in 12 months, the the rate was -1.13%. Among the 24 activities surveyed, nine recorded positive changes of prices, against 14 in the previous month. The Producer Price Index (IPP) measures the price evolution of products 'at the factory gate', without taxes or freights.

The complete publication of the IPP can be accessed here.

Table 1
Producer Price Indexes, by Mining and Quarrying and Manufacturing Industries
(General Industry) and Sections - Last three months

Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria

The for major changes observed in October/2016 occurred among products included in the following industrial activities: beverages (4.50%), toiletries, soaps and cleaning preparations (2.21%), mining and quarrying (-1.94%) and tobacco (-1.75%). In terms of influence, the highlights were beverages (0.14 p.p.), basic metals (-0.12 p.p.), food (0.09 p.p.) and oil refining and ethanol products (0.07 p.p.).

The cumulative index of the year reached -0.36%, against -0.46% in the previous month. Other chemical products (-12.50%), tobacco (-11.66%), other transportation equipment (-11.36%) and mining and quarrying industries (9.98%) were the activities with the biggest changes. The most influential sectors were food products (1.69 p.p.), other chemicals (-1.34 p.p.) oil refining and ethanol products (- 0.52 p.p.) and motor vehicles (0.30 p.p.).

Comparing October 2016 with October 2015, the price change was of -1.13%, against 0.52% in September/2016. The four greatest changes occurred in other chemicals (-15.38%), printing (14.30%), tobacco (-11.85%) and other transportation equipment (-11.45%). In this indicator, the most influential sectors were food products (1.89 p.p.), other chemicals (-1.69 p.p.), oil refining and ethanol products (- 0.36 p.p.) and paper and pulp (-0.35 p.p.).

Among the major economic categories, the change of October 2016 over September's reflected 0.01% in capital goods; -0.48% in intermediate goods; and 1.03% in consumer goods, but 0.13% was in durable consumer goods and 1.30% in semi- and non-durable consumer goods. The influenced was of 0.00 p.p. of capital goods, -0.27 p.p. of intermediate goods and 0.37 p.p. of consumer goods. In the case of consumer goods, the 0.36 p.p. figure was due to price changes in semi-durable and non-durable goods and 0.01 p.p. in durable consumer goods.

Table 4
Producer Price Indexes, by Mining and Quarrying and manufacturing Industries (General Industry)
And major Economic Categories - Last three months

Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria

In the cumulative index of the year, the changes were: -2.06% in capital goods (with influence of -0.18 p.p.), -2.57% in intermediate goods (-1.46 p.p.) and 3.69% in consumer goods (1.28 p.p.). In the latter case, the increase was influenced on 0.22 p.p. by durable consumer goods and 1.06 p.p. by the semi-durable and non-durable consumer goods.

In relation to the last 12 months, the changes were: capital goods, -2.26% (-0.20 p.p.); intermediate goods, -4.34% (-2.49 p.p.); and consumer goods 4.58% (1.56 p.p.), but the influence of durable consumer goods was of 0.23 p.p. whereas that of semi-and non-durable consumer goods was of 1.33 p.p.

Next, are the sectors that were among the four main influences in October 2016, in the three comparisons: monthly, cumulative index in the year and cumulative index in the 12 months.

Food: the average price change in food products in October 2016 (0.39%) was lower than the one observed in the previous month (0.93%). The cumulative index in the year reached 8.43% and, in the comparison with the same month of 2015, prices became 9.62% higher, the lowest rate since August 2015 (7.84%).

Among the products, “sterilized/ UHT / long life milk”, “crystallized sugar” and “refined soybean oil” come up both among the four major (in module) changes and among the greatest influences. Just “sterilized / UHT / long life milk” had a negative change, following the movement started in August, after the product's prices had changed positively from January to July 2016. The fourth product, among the highlights in terms of influence, with a negative change also was 'residue of soybean extraction'. The four items which had the greatest influence accounted for -0.04 p.p. of the change of 0.39%.

Beverages: in October 2016, beverages' prices had an average positive change of 4.50%, the highest result since October 2015, 9.57% (the highest result of the series started in January 2010). The cumulative indicator in the year offset the rate of -1.93% (September) to 2.48%. In the comparison between October/2016 and October/2015, the result of 0.23% is the lowest in the series. The sector had the greatest influence in the month on month calculation of the mining and quarrying industries and manufacturing industries (0.14 p.p.)

Paper and pulp: following the behavior seen in the last month, the paper and pulp sector kept presenting a negative average change of prices (-0.11%). This result, however, shows a reduction in the price decline, in comparison with the result of the previous year (-0.36%). This is the lowest price fall presented since February/16.

The products of greatest influence this month, accounting for -0.12 p.p. of the total change of the sector (-0.11%), were: “pulp”, “writing, printing and other graphic use paper, of inorganic matter uncoated”, “notebooks” and “kraft paper for packaging, uncoated”.

In the cumulative index of the year, the average change of prices was -7.34%. In the last 12 months, the result was of -9.22%. In comparison with the other 23 sectors surveyed by the IPP, this sector had the fourth greatest influence on the result.

Oil refining and ethanol products - the prices of this activity had, after two months, a positive change (0.74%). Even so, the cumulative index in the year kept negative, from -5.66% (September) to -4.96%. In the comparison with the same month of 2015, the result is also negative (-3.48%).

The positive pressures in terms of influence came from 'ethyl alcohol (anhydrous or hydrated) and 'naphthas', which mostly offset the negative influence of the two main products in terms of weight: “diesel fuel e other fuel oils” and “motor gasoline”. The four items which had the greatest influence accounted for -0.54 p.p. of the change of 0.74% in the sector.

Other chemicals: the chemical industry in October kept stable in relation to September (null change), resulting from the same cumulative index in the year (-12.50% - the greatest change among all activities). When compared to the values of the same month in the previous year, the sector's prices present change of -15.38%, the highest ones, in absolute values, and, consequently, the greatest price reduction of the survey.

The four products of highest influence month on month - manure and NPK fertilizers, unsaturated propane (propylene), unsaturated ethylene (ethane) and polypropylene (PP) - represent a negative result by 0.20 p.p. in the null result of the month, which means the other 28 products contributed positively with 0.20 p.p.

Basic metals: comparing the sector's prices in October and September of 2016, there was, for the second time in a row, a negative change of prices (-1.69%), breaking the series of four consecutive increases. The sector accumulated an annual change of 0.28% and, in the last 12 months, of -2.44%.

“Carbon steel ingots, blocks, billets and plates”, “unwrought non-alloy aluminum”, “carbon steel hot-rolled coil, uncoated” and “carbon steel cold-rolled coils, uncoated” were the four products standing out in the month on month influence analysis and represented -1.77 p.p. of the monthly change.

Motor vehicles: in October, the change in the sector was of 0.41%, the cumulative index in the year stood at 2.81%. In October 2015, the cumulative index was of 5.92%. In the last 12 months, the sector had a change of 3.19%.

Besides being one of the sectors of greatest weight in the calculation of the overall index (just behind food), the highlight to motor vehicles was due to the fact that it is the fourth (in module) influence in the cumulative change in the year (0.30 p.p. in -0.36%).

Among the four products of greatest influence, those of highest weight in the activity ('diesel truck with load capacity above 5t' and 'flex-fuel, gasoline or ethanol passenger car with any engine power output') had a positive impact and 'gear boxes for motor vehicles' presented negative change. The influence of these four products was of 0.45 p.p. in 0.41%.