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Industrial prices fall 0.18% in December, close 2023 with a drop of 4.98%

Section: Economic Statistics | Igor Ferreira

February 01, 2024 09h00 AM | Last Updated: February 02, 2024 10h44 AM

The activity of petroleum refining and biofuels exerted the biggest influence (-1.85 pp) on the cumulative result of the year - Picture: André Valentin/Agência Petrobras

The prices of the industrial sector registered a negative change of 0.18% in December 2023 over the previous month, the second negative figure in a row. As a result, industrial inflation closed the year of 2023 with a drop of 4.98%, the most intense negative change accumulated in a year end since the beginning of the time series in 2014. The data are from the Producer Price Index (IPP), released today (1) by the IBGE. The rate recorded in 2023 was nearly eight percentage points (pp) lower than that in 2022 (3.16%).

“2023 showed two different times concerning the evolution of the average prices. The first semester showed the continuity of a process already noticed since the second half of 2022, with the consolidation of a widespread deflationary path. From July onwards, however, market movements already signaled that that scenario was changing. The following months showed some inflationary containment, with the IPP reporting positive and negative rates from one month to the other. When analyzing the result of 2023, one should also cast a light on the cumulative exchange appreciation in the year, which relieved the cost to import inputs, made the final goods produced abroad more competitive and reduced the amount received in reais by Brazilian exporters,” explains Felipe Câmara, an analyst of the IPP.


The IPP measures the change in prices of products at the "factory gate", without tax or freight, of 24 activities of mining and quarrying and manufacturing industries. The activities that recorded the highest changes in the cumulative index in the year in December 2023 were other chemicals (-17.25%), petroleum refining and biofuels (-15.45%), pulp and paper (-15.23%) and basic metals (-9.77%). On the other hand, the major influences on the cumulative index of the overall industry came from petroleum refining and biofuels (-1.85 pp), other chemicals (-1.51 pp), basic metals (-0.60 pp) and food products (-0.60 pp).

“After months restoring stocks due to an uncertain supply capacity current and forecast, the redirection of commercial flows and gradual revision of the expected unbalance between supply and demand in the second half of 2022 caused the quotation of the commodities key to the Brazilian industrial chains to drop in the foreign market. The movement persisted until the first semester of 2023, with a later moderation in the curve of prices. It is the case of oil barrel, the major input of the refining sector. Something similar occurred with fertilizers and pesticides, items of the chemical industry consumed in the crops. The foreign prices of the macronutrients have been facing a weaker demand and a reduction in the production costs. Under the domestic point of view, the low expectations in the latest months in relation to the harvests in the beginning of 2024 have restrained the demand for these products,” adds Câmara.

“Another important activity in the year was the manufacture of food products. After a significant harvest in 2023, soybean agribusiness derivatives (bran and oil) topped the list of influences for the cumulative negative change in the sector, more than offsetting relevant rises, like those of VHP sugar and rice. In basic metals, aluminum products leveraged the sectoral drop due to reasons similar to those described for the other commodities. The market for these items was cooling down due to the low activity perceived and forecast in the consuming chains along the year, something that also extended to the steel sector,” concludes Câmara.

Under the perspective of the broad economic categories, the annual result is based on the change of -1.62% in capital goods (with an influence of -0.12 pp), -7.87% in intermediate goods (-4.52 pp) and -0.96% in consumer goods (-0.34 pp).

In relation to the month of December 2023, the change over the previous month was -0.18%, leveraged by the smaller prices of refining, especially that of diesel fuel. In November, compared with October, industry had registered a drop of 0.34%.


In the last month of the year, 12 out of 24 industrial activities investigated recorded negative price changes over November, following the sign of the change in the overall industry. The highlights were: petroleum refining and biofuels (-4.05%), mining and quarrying industries (2.30%), pulp and paper (2.01%) and toiletries, soaps and cleaning products (1.50%). In terms of influence, the activities that mostly highlighted were petroleum refining and biofuels (-0.45 pp), food products (0.14 pp), mining and quarrying industries (0.11 pp) and other chemicals (-0.09 pp).

Among the broad economic categories, the change in the prices between November and December was -0.27% in capital goods (with an influence of -0.02 pp), -0.49% in intermediate goods (-0.27 pp) and 0.31% in consumer goods (0.11 pp).

Know more about the IPP

The IPP aims at measuring the average change of sale prices received by the domestic producers of goods and services, as well as their evolution over time, signaling the short-term inflationary trends in Brazil.  It is a key indicator for the macroeconomic follow up and, consequently, a valuable analytical instrument for decision makers, either public or private.

The survey investigates, in a few more than 2,100 enterprises, the prices received by producers, free from tax, tariffs and freight, defined according the most usual commercial practices. Nearly 6 thousand prices are collected monthly. The complete IPP tables with results are available at Sidra. The next release of the IPP, related to January, will be on March 5.

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