After rising 1.35% in December 2024 compared with the previous month, prices of the national industry decelerated to 0.13% in January 2025. It is the twelfth consecutive rise in this indicator. The rate had been -0.24% in January 2024. As a result, the Producer Price Index (IPP) accumulates a rise of 9.69% in 12 months, the ninth positive figure in a row and the highest one since September 2022 (9.84%). The data were released today (14) by the IBGE.

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. In January 2025, 14 industrial activities surveyed registered positive price changes when compared with the immediately previous month, following the index of the overall industry. In December last year, 22 activities had shown higher average prices in relation to the previous month.

"Positive for the twelfth consecutive time in the monthly comparison, the result of the IPP in January was the lowest one in this sequence. The deceleration is linked, to a great extent, to the negative change in food prices. The valuation of the real against the dollar between December and January (1.2%) should be taken into account , as it impacts several sectors like tobacco and wood, as well as food and basic metals. On the other hand, market issues explain the movements as well," explains Alexandre Brandão, an IPP analyst.

The industrial activities responsible for the biggest influences on the January´s figure were food (-0.22 p.p.), petroleum refining and biofuels (0.15 p.p.), other chemicals (0.14 p.p.) and mining and quarrying industries (-0.07 p.p.).

The food sector (-0.84%), which has the highest weight in the calculation of the IPP< negatively changed after a sequence of nine months with increasing prices. It had registered 1.65% in December last year. The cumulative index in 12 months, which was 13.80% in December, stayed at 13.64% in January, completing a series of eight positive figures. "Food prices have reacted to the reductions in the supply in general, in accordance with climate problems that have been happening over the last years (excess of drought or rainfall). The improvement in the domestic income exerts a demand pressure on the sector. In January, the valuation of the real against the dollar, the harvest of sugarcane and soybeans and a smaller demand for meat (December has a higher demand of the product due to the Holiday Season) mostly explain the retreat noticed," adds Brandão.

The sector of petroleum refining and biofuels, which is one of the major influences on the overall result of industry, rose 1.49%, the third consecutive positive figure and the highest one of them. The cumulative index in 12 months jumped from 1.47% in December to 8.14% in January, the highest change since July 2024 (14.17%). According to the IBGE analyst, "unlike minerals, which are rising, the price of crude petroleum oil exerts pressure on the products that use it as a raw material."

The activity of other chemicals (1.72%) showed a significant positive change as well. "On the one hand, the prices of that sector react to currency movements (for instance, manure is a highly imported product). On the other hand, the agricultural sector pressures products used in planting. Many chemicals use refining products, which are increasing," reminds Brandão.

The prices of the sector of mining and quarrying industries, in turn, dropped 1.49% in relation to the previous month, after three consecutive positive rates. That negative change, the fourth most intense in the comparison between January 2025 and December 2024, occurred due to the retreat in the prices of minerals, either ore or non-metallic ones. The products from the extraction of petroleum and natural gas recorded a positive change. "In the case of mining and quarrying industries, the prices practiced in Brazil usually follow those from the foreign market. It explains the most recent reduction (impacted by minerals prices) and the previous upward and downward movements," concludes Brandão.

In contrast, the sector of basic metals registered an average change of -0.54%. That result occurs after 13 consecutive positive rates, producing a cumulative index of 26.77% over the last 12 months. It was the most intense change and the second biggest influence (1.59 p.p. out of 9.69%) in this indicator among the activities surveyed.
Among the major economic categories, the price changes from December 2024 to January 2025 were the following: 0.53% in capital goods (BK), -0.19% in intermediate goods (BI), and 0.53% in consumer goods (BC), being the change reported in durable consumer goods of 1.24% and that in semi and non-durable consumer goods, of 0.39%.

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 to the most usual commercial practices. Nearly 6 thousand prices are collected monthly. The complete IPP tables are available on Sidra. The next release of the IPP, related to February, will be on April 9.