In May 2016, the prices of the general industry changed, on average, 0.12% when compared to the previous month's rate, a higher figure than that of April (-0.11%). Among the 24 activities of the mining and quarrying and manufacturing industries, 16 recorded positive price changes, against 13 in the previous month. The cumulative rate of the year stood at 0.07%, against -0.19% in April, and the cumulative rate in 12 months was 2.26%, against 3.06% in April. In May 2016, the index stood at 0.90%.

The Producer Price Index (IPP) of the Mining and Quarrying and Manufacturing Industries measures the evolution of “factory-gate” prices of products, without taxes or freight. It includes information on the major economic categories, like capital goods, intermediate goods and consumer goods – durable, semi-durable and non-durable. The complete publication of the IPP can be accessed here.

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

In May 2017, the price change of -0.12% against April reflected in the Major Economic Categories as follows: 0.73% in capital goods; -0.27% in intermediate goods; and 0.58% in consumer goods: 1.65% in durable consumer goods and 0.25% in semi and non-durable consumer goods.

The influence of the Major Economic Categories was -0.06 p.p. in capital goods, -0.15 p.p. in intermediate goods and 0.20 p.p. in consumer goods. In the case of consumer goods, 0.07 p.p. was due to price changes observed in semi and non-durable consumer goods and 0.14 p.p. in durable consumer goods.

As to the cumulative index over the year (current month against December last year), the price changes in industry reached, until May, a change of -0.07%: 1.16% in capital goods (with influence of 0.10 p.p.), 0.30% in intermediate goods (0.16 p.p.) and -0.94% in consumer goods (-0.33 p.p.). In the latter, the result had an influence of 0.26 p.p. by “durable consumer goods” and of -0.59, by “semi and non-durable consumer goods”.

In the cumulative index over 12 months, the price change in the industry reached, in May, 2.26%, with the following changes: capital goods, 1.49% (0.13 p.p.); intermediate goods, 2.16% (1.21 p.p.); and consumer goods, 2.59% (0.92 p.p.), but the influence of durable consumer goods was 0.42 p.p. and of semi and non-durable consumer goods, of 0.49 p.p.

Producer Price Indexes, by Mining and Quarrying and Mnufacturing Industries (General industry)
and Major Economic Categories - Last three months

Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria

Sixteen of 24 industrial activities with price increase

In May 2017, over April, 16 of the 24 activities registered positive price changes, against 13 in the previous month. The four biggest changes were those of products belonging to the activities of mining and quarrying industries (-10.95%), paper and pulp (2.55%), oil refining and ethanol production (2.45%) and tobacco (1.92%).

The most influential items, in the comparison between May and April, were mining and quarrying industries (-0.41 p.p.), oil refining and ethanol products (0.24 p.p.), motor vehicles (0.15 p.p.) and other chemicals (-0.14 p.p.).

In the cumulative index of the year (-0.07%), the activities that in May/2017 had the biggest percentage changes were: mining and quarrying industries (-9.22%), basic metals (8.00%), non-metallic mineral products (-5.53%) and food products (-4.42%). In this indicator, the sectors of highest influence were food products (-0.95 p.p.), basic metals (0.59 p.p.), mining and quarrying industries (-0.34 p.p.) and motor vehicles (0.30 p.p.).

In the cumulative index in 12 months (2.26%), the four biggest price changes occurred in basic metals (14.57%), non-metallic mineral products (-7.66%), mining and quarrying industries (6.51%) and toiletries, soaps and cleaning preparations (5.81%). Considering this indicator, the main contributions came from: basic metals (1.03 p.p.), motor vehicles (0.57 p.p.), oil refining and ethanol production (0.46 p.p.) and other chemical products (-0.23 p.p.).

Mining and quarrying industries: on average, the sector's prices in the comparison between May and April, changed -10.95%, pushed by the negative change seen in the prices of 'iron ore'. As a result, the cumulative change inverted April's trend, having become in May, -9.22%. At last, the cumulative indicator in 12 months stayed at 6.51%, the lowest result since November 2016 (5.58%).

Food products:  in May 2017, the average change of prices of the sector was 0.30% - the first positive result of the year, which did not prevent the cumulative index from keeping negative (-4.42%). In the annual comparison, the change of 0.87% between May 2017 and May 2016 is the lowest since November 2014 (-0.66%).

Among the highlights, three products ('cured beef or pork, not integrated to slaughter', 'fresh or cooled beef' and 'refined cane sugar') stand out both in terms of change and influence:  in the case of influence, the fourth product is 'crystallized sugar', whose prices, as in the case of the other sugar in contrast with the two other products, had, on average, a negative change. All in all, the four most influential changes had a null impact (zero percentage points) in the 0.30% change; therefore, the other 39 products established the influence registered.

The declining prices of 'crystallized sugar' and of 'refined cane sugar' are in line with the beginning of the crops, but reflect also the foreign market trend. In the case of 'fresh or cooled beef' and of 'cured beef or pork, not integrated to slaughter', the enterprises in general had a greater demand, both domestic and foreign ones.

Petroleum refining and ethanol products:  after three consecutive drops, the average prices of the sector in the comparison with April represented a positive change of 2.45%. Thus, the cumulative index went from -2.07%, in April, to 0.33%, in May. In the comparison May 2017/May 2016, there was a 4.72% change.

All petroleum derivatives indicated as highlights had positive price changes, in contrast with the negative change of 'ethyl alcohol (anhydrous or hydrated)', in accordance with the sugar cane crop phase. In the case of petroleum derivatives, the increase is coherent with the increase in the prices of 'Crude petroleum oil', which is seen both at the edge (increase in May over April) and in the annual comparison (May 2017 against May 2016).

Other chemicals: the chemical industry recorded in the month of May a negative change of prices of 1.42% in relation to the month of April. It was the second negative change in the last nine months in this type of comparison, which generates cumulative changes of prices, in the year, of 2.29% and , in 12 months, of -2.33%. In order to highlight that the comparison basis of prices was at a low standard, one can verify that in terms of cumulative change of prices, in relation to December 2013, the activity reached 1.95% - a very distant value from the peak reached in October 2015, which was of 17.48%.

An aspect to be emphasized is that the main price changes occurred in products of a lower weight in the calculations, and that, among those of a bigger value, just 'manure and NPK fertilizers' reports a positive result. All the other products with more significant influences on the activity's results present reduction of prices: 'styrene-butadiene rubber', 'styrene' and 'propane (propylene), unsaturated.'

It should be noted that the four products of greatest influence from April to May recorded -0.88 p.p. in the monthly result, i. e., the other 28 products contributed with -0.54 p.p.

Basic metals: comparing the prices of May 2017, against April 2017, there was a positive change of 0.29%, the seventh increase of prices in a row. This way, the sector accumulated in a year a result of 8.00% and in the last 12 months a change of 14.57%. It was the highest price change in the index among all the 24 activities surveyed. In May 2016, the situation was quite the opposite: the Basic metals sector presented the second biggest price drop in this type of comparison (-3.94%).

In relation to the most influential products on the MoM results, three out of the four products of biggest weight come up: 'carbon steel ingots, blocks, billets or plates' and 'carbon steel hot-rolled coil, uncoated' had negative influence, whereas 'unwrought aluminum non-alloy' and 'unwrought aluminum alloy' had positive influence. Among the 22 selected products for the survey, the four products standing out represented 0.27 p.p. of the monthly change, i. e., the other 18 products had an influence of 0.02 p.p.

Motor vehicles:  between April and May, the change seen in the sector was of 1.35%. This was the tenth positive change in a row of the activity in this type of comparison, which has been having positive results since August 2016. Besides, this was the biggest change seen in the activity since January 2016, when it presented a 2.13% result. Thus, the cumulative change in the year reached 2.78%. In terms of comparison, in May 2016, the cumulative index was of 1.37%. In the last 12 month, the sector accumulated a 5.33% change.

Among the four products of greatest influence in the monthly indicator, all had positive impact in the index ('biofuel, gasoline or ethanol passenger car of any engine power output', tractor truck for trailers and semi-trailers', 'body for buses' and 'breaks for motor vehicles' - the first two ones are among the products with the greatest weight in the activity). The influence of these four products of highest influence in the monthly change was of 1.37 p.p. in 1.35%, i. e., the other 21 products of the activity contributed with -0.02 p.p.

Social Communication
June 28, 2017