Domestic industry prices fell by 1.29% in May from April (-0.12%), the fourth consecutive negative rate after a series of 12 consecutive positive results, between February 2024 and January 2025. The May result represents the most significant change in 2025, and the biggest drop since June 2023 (-2.72%). The Producer Price Index (PPI), therefore, rose by 5.78% in 12 months and the cumulative total for the year was -1.97%, the second biggest cumulative decline in the first five months of the year in the time series of the survey, only behind May 2023 (-3.84%). In May 2024, the monthly change was 0.36%.

The Producer Price Index (PPI) for Mining and Quarrying and Manufacturing Industries measures the prices of products “at the factory gate”, without taxes and freight, and covers broad economic categories

In May 2025, 17 of the 24 activities of industry surveyed showed negative price changes against the previous month, in line with the index change in general industry. In April this year, eight activities recorded lower average prices compared to March. The data was released today (4) by IBGE.

“The IPP in May showed a downward trend spread across much of the industry. Two main points may account for this result: the first is the decrease in the prices of several commodities in the month, which ends up reducing production costs throughout the chain with an impact on prices in several sectors.

The second one is the new drop in the dollar against the real, which in May was 2.0%, with a cumulative decrease of 7.1% in 2025, which also ends up reducing costs in some sectors and directly reduces the price of those products that are traded in dollars. It also explains the negative results of the last twelve months," said Murilo Alvim, manager of IPP.   

The industrial activities responsible for the greatest influences on the May result were food products (0.34 p.p.), petroleum refining and biofuels (-0.28 p.p.), other chemicals (-0.26 p.p.) and basic metals (-0.23 p.p.).

In terms of change, printing (4.36%), basic metals (-3.46%), other chemicals (-3.11%) and mining and quarrying industry (-3.03%) were the highlights in May. 

The food sector (-1.33%) showed a negative change again, after advancing 1.52% from March to April (the only positive result in 2025). Thus, the year-to-date figure is -2.81%. In May 2025, prices were 10.99% higher than in May 2024, the lowest result since October 2024 (10.81%). The result for May this year, in the 12-month period, represented the third biggest change recorded among the 24 industrial sectors analyzed. The change in food products was the first in the ranking of greatest influences on the monthly change (-0.34 p.p.), in the year-to-date (-0.72 p.p.) and in the 12-month period (2.67 p.p.).

“The result of food products driven downwards by the reduction in the prices of commodities such as sugarcane and soybeans, both in the crop period, which increases the supply of these products. With the reduction in costs due to the lower value of sugarcane, sugar prices fell, especially VHP sugar, which is an exportable product and was impacted by the fall in the dollar, causing sugar manufacturing and refining to fall by 4.68% in the month. Soybean products also reduced their prices in May, causing the vegetable oils and fats manufacturing group to fall (-3.05%) in the month”, explains Murilo. 

From April to May 2025, petroleum refining and biofuels (-2.77%) accounted for the second greatest influence (-0.28 p.p.) on the negative performance of industry, among all the activities surveyed. This is the third consecutive month of decline, although less intense against April (-3.38%). The cumulative result in 12 months (0.68%), although positive, was the lowest since December 2024 (1.47%), when there was the first positive rate after three negative rates between September and November. The result for May placed the sector, among the 24 observed by the IPP, as the second main influence on the monthly indicator (-0.28 p.p. in -1.29%), and the fourth in the cumulative result in the year (-0.30 p.p. in -1.97%).

The segment representing the third biggest weight on the PPI calculation, other chemicals (-3.11%) intensified the deceleration observed in April (-0.61%). It was the second biggest negative change in May, among all the sectors surveyed, accounting for  -0.26 p.p of the rate (-1.29%) in general industry. In the cumulative indicators in the year (0.34%) and in the last 12 months (9.36%), however, the rates remained positive.

“In the case of petroleum refining and biofuels, and other chemicals, petroleum prices have been falling and this helps explain some of the results, following the price on the international market and impacting the entire chain. The drop of petroleum refining and biofuels was driven by the lower prices of some oil derivatives, particularly diesel oil, fuel oils and naphtha. In the chemical sector, much of the influence came from oil products, such as petrochemicals, especially unsaturated propylene, and thermoplastic resins, especially polypropylene,” Murilo notes.  

From the perspective of broad economic categories, the price change observed from April to May 2025 had the following repercussions: a -0.02% change in capital goods (BK); -2.37% in intermediate goods (BI); and 0.00% in consumer goods (BC), with the change observed in durable consumer goods (BCD) being 0.35%, while in semi-durable and non-durable consumer goods (BCND) it was -0.07%.

Intermediate goods (-1.29 p.p.) were the ones that most influenced the IPP in May. According to the survey manager, they “are usually the economic category that is most impacted by the dollar, since many commodity prices, mostly intermediate goods, are quoted in dollars on international stock exchanges and have been impacted by the recent fall in the exchange rate”.
 

More about the IPP

The IPP measures the average change of sale prices of 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, at either the public or private sphere. 

The survey investigates, in a few more than 2,100 enterprises, the prices received by producers, free from tax, tariffs and freight, defined according to the most usual commercial practices. approximately six thousand prices are collected monthly. The complete IPP tables are available on Sidra. The coming edition of the IPP, relative to June, will be available on August 7.