In March 2016, the prices of the overall industry changed, on average, -1.21% when compared with the previous month, a figure below that of February (-0.63%). The March´s figure was the lowest in the time series started in January 2014. The cumulative index in the year hit -1.17%, against 0.04% in February. The cumulative index in 12 months reached 5.25%, against 8.52% in February. Among the 24 activities of the mining and quarrying and manufacturing industries, eight of them recorded positive price changes, against ten in the previous month.

The Producer Price Index (IPP) of the Mining and Quarrying and Manufacturing Industries measures the evolution of the prices of products 'at the factory gate', without taxes and 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, according to Overall Industry and Major Economic Categories Last three months

Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria

In March 2016, the price change of -1.21% against February reflected in the major economic categories like this: -1.00% in capital goods; -1.81% in intermediate goods; and -0.29% in consumer goods, being -0.07% reported in durable consumer goods and -0.36% in semi and non-durable consumer goods.

The influence of the major economic categories on the overall industry was as follows: -0.09 percentage points (p.p) from capital goods, -1.02 p.p. from intermediate goods and -0.10 p.p. from consumer goods. In the case of consumer goods, -0.10 p.p. was due to price changes observed in semi and non-durable consumer goods and -0.01 p.p. in durable consumer goods.

Concerning the cumulative index in the year, the price changes in industry changed -1.17% up to March, being 0.95% due to capital goods (influencing 0.08 p.p.), -3.01% to intermediate goods (-1.71 p.p.) and 1.33% to consumer goods (0.46 p.p.). In this last case, the increase was influenced by “durable consumer goods” (0.15 p.p.) and by “semi and non-durable consumer goods” (0.31 p.p.).

In the cumulative index in 12 months, the price changes in industry hit 5.25% up to March, comprising: capital goods, 8.10% (0.70 p.p. of influence); intermediate goods, 3.09% (1.75 p.p.); and consumer goods, 8.09% (2.79 p.p.), being the influence of 'durable consumer goods' 0.39 p.p. and that of 'semi and non-durable consumer goods', 2.41 p.p.

Producer Price Indexes, according to Overall Industry and Sections Last three months

Eight of 24 industrial activities rise

In March 2016, eight out of the 24 activities registered positive price changes in relation to the immediately previous month, against 10 in the previous month. The four biggest changes were recorded in mining and quarrying industries (6.56%), other transportation equipment (-4.86%), tobacco (-4.86%) and other chemicals (-4.11%). The biggest influences came from other chemicals (-0.43 p.p.), food products (-0.34 p.p.), pulp and paper (-0.15 p.p.) and mining and quarrying industries (0.15 p.p.).

The cumulative indicator in the year reached -1.17% in March 2016, against 0.04% in February. Among the activities that posted the highest percentage changes in this indicator, the highlights were: mining and quarrying industries (-9.23%), other chemicals (-6.35%), manufacture of wearing apparel and accessories (5.14%) and fabricated metal products (4.93%). The biggest influences came from other chemicals (-0.68 p.p.), oil refining and ethanol products (-0.44 p.p.), mining and quarrying industries (-0.25 p.p.) and motor vehicles (0.19 p.p.).

In the cumulative index in 12 months, the price change in March 2016 was of 5.25%, against 8.52% in the previous month. The four biggest changes were registered in mining and quarrying industries (-20.17%), other transportation equipment (15.22%), toiletries, soaps and cleaning products (14.77%) and tobacco (13.90%). The sectors that mostly influenced this indicator were: food products (2.26 p.p.), mining and quarrying industries (-0.67 p.p.), motor vehicles (0.59 p.p.) and other chemicals (0.54 percentage points).

Mining and quarrying industries: after registering consecutive negative figures since November 2015, this activity changed 6.56% in March over the previous month. Even considering this positive figure, both the cumulative index in the year (-9.23%) and the comparison with the same month last year (-20.17%) remained on the negative side. The positive result in March was due to the changes in 'crude petroleum oil' and 'iron ores', which, on their turn, were negative in the other comparisons.

Food products: the average change of the products that comprise this activity was of -1.68% in March, posting the first negative figure since May 2015 (-0.63%) and the second highest negative figure in the time series (the first was registered in February 2013, -2.58%). Considering this change, the cumulative index declined from 1.95% in February to 0.24% in March. Having changed 11.82%, the cumulative index in 12 months reached the lowest figure since August 2015 (7.84%).

Three products were among the four highest changes and also among the four biggest influences: 'sterilized/UHT/long life milk', 'fresh or cooled beef' and 'frozen beef'. Among them, the prices changes of beef were negative and of milk, positive. The fourth highlight in terms of influence was 'residue of soybean oil extraction', also with a negative change. These four items accounted for -1.19 p.p. in the change of -1.68%.

Pulp and paper: the sector that manufactures pulp, paper and paper products recorded the biggest drop in the producer price index of March since the beginning of the time series in January 2010: about -4.04% in relation to the previous month. Considering the March´s index, this sector posted a cumulative drop of -2.58% in 2016, though registering a positive change of 8.34% since March 2015.

The four products that mostly influenced this sector in March were: 'pulp', 'uncoated Kraft paper for packaging', 'paper for writing, printing and other graphic purposes, uncoated by inorganic matter' and 'wavy or corrugated paperboard boxes'. These four products accounted for -4.06 p.p. in the change of -4.04% in this sector.

Oil refining and ethanol products: compared with February, the prices of this sector changed, on average, -0.54% in March. As a result, the cumulative change in the year stood at -4.19%. The change was positive (4.11%) when compared with the same month in 2015.

The retreat in 'naphtha' and 'basic lubricants' stood out in terms of negative change, offsetting the positive changes in 'motor gasoline' and 'diesel fuel and other fuel oils'. The last two products weighted the most in the computation of this activity, adding up to about 70%. Therefore, it should be concluded that the changes in the dropping products were more intense, virtually offsetting the weight of these products. The four most influential products accounted for -0.55 p.p. in the change of -0.54%.

Other chemicals: the prices of the chemical industry recorded a negative change of 4.11% in March, the biggest drop in this type of comparison since the beginning of the IPP time series in January 2010, which resulted in a cumulative change of prices of -6.35% in the year and of 5.33% in 12 months.

The four products that mostly influenced the month over immediately previous month comparison – 'NPK-based manure and fertilizers', 'unsaturated ethylene (ethene)', 'polypropylene (PP)' and 'HDPE' – accounted for -2.62 p.p. of the result of -4.11%, i.e., the other 28 products contributed with -1.49 p.p.

Motor vehicles: the average change of the products of the sector of motor vehicles was of -0.26% in March, causing the cumulative index in the year to retreat from 2.09% in February to 1.82% in March. Compared with the same month in 2015, the prices were 5.47% higher in March 2016 than in March 2015, in a time series which was decreasing since January 2016 (7.14%).

The highlights in relation to the previous month were the negative changes of prices, both in terms of change and influence. Two products – 'gearbox for motor vehicles' and 'bodies for buses' – appeared in both lists. In terms of influence, the other two were 'engine parts for motor vehicles' and 'tractor trucks for trailers and semi-trailers'. The four most influential products accounted for -0.21 p.p. in the change of -0.26%.

Other transportation equipment: the prices in this sector changed -4.86% in March 2016 over the immediately previous month, repeating the sign of the February´s change (-0.32%). The cumulative change in the year registered -1.58%. Compared with the same month a year ago, the prices in this sector increased 15.22%, the second highest rate in the overall industry and the highest one in the manufacturing industry.

The reduction recorded in the prices of 'Airplanes weighting more than 2,000kg' – dependent on the R$/US$ currency exchange rate – was the main responsible for the March´s figure. The other two products surveyed – 'Manufacture and maintenance of ships' and 'Motorcycles with more than 50cm3' – were more expensive in March than in February.