The Producer Price Index (IPP) changed by 0.15% in the May/April comparison, and was below the April rate (0.34%). As a result, the cumulative index in the year reached 2.65%, versus 2.50% in April, and the cumulative index in the last 12 months reached 6-10%, versus 5.66% in April.

IPP measures the evolution of “factory gate” prices, excluded taxes or freight, for 23 manufacturing industry sectors. The complete publication is available at https://www.ibge.gov.br/english/estatistica/indicadores/precos/ipp/default.shtm.

In May 2015, the prices of Manufacturing Industry ranged, on the average, by 0.15% versus those in April 2015, a figure below that between April 2015 and March 2015 (0.34%). In the monthly comparison, 17 of the 23 activities recorded price rises, versus 14 in the previous month.

The four biggest changes in May were recorded by optical, electronic and computer equipment (2.80%), toiletries, soaps and cleaning products (2.04%), beverages (1.84%) and textiles (1.56%). In terms of influence, in the monthly comparison (0.15%), the highlights were food products (0.12 percentage points), motor vehicles (0.09 percentage points), and optical, electronic and computer equipment (-0.07 p.p) and beverages (0.06 p. p.).

The cumulative indicator in the year (May 2015 versus December/2014) reached 2.65%, versus 2.50% in April 2015. Among the activities which recorded the main percentage changes in terms of this   indicator, the highlights were: other transportation equipment (12.60%), tobacco (11.45,%), wood (9.40%) and pulp and paper (8.29%). The main sectors were food motor vehicles (0.40 percentage points), oil refining and ethanol production (-0.34 percentage points),   other chemical products (0.32 percentage points) and pulp and paper (0.29 percentage points).

The cumulative indicator in 12 months was 6.10%, versus 5.66% in April. The four biggest changes were those of other transportation equipment (26.61%), tobacco (24.52%), wood (18.10%) and pulp and paper (17.71%). The main influences on the cumulative index in 12 months came from motor vehicles (0.95 percentage points), food products (0.71 percentage points), metallurgy (0.62 percentage points) and pulp and paper (0.59 percentage points).

The following analyses refer to eight subsectors which stood out in May, considering the three indicators approached (monthly, cumulative and cumulative in 12 month), and at least one of the criteria: biggeest price changes and biggest contribution to the result.

Food products: prices changed, in relation to April, by -0.63%, which means the second fall in a row (-0.76% in April versus March). With this result, the sector presents cumulative increase of 1.02% throughout 2015. In relation to May 2014, there was increase of 3.59%. It is worth mentioning that, with the resut of May, the sector accounted for its biggest negative contribution to manufacturing industry, -0.12 percentage points (by 0.15%), which is also the biggest module contribution (followed by 0.09 percentage points of motor vehicles).

Among the four products highlighted in terms of influence, three ("residude from soybean extraction", "frozen beef and poultry offal" and "refined soybean oil") recorded negative results, counterbalanced by the positive change in the prices of "fresh or cooled beef". This product and "residue from soybean extraction" also accounted for the four biggest changes, also considering the positive changes of "yeast" and "yogurt. The four most influential products represented a contribution of -0.96 percentage points (-0.63%), which indicated that the other 39 products had total positive influence of 0.33 percentage points.

Beverages: products in this subsector recorded, in May 2015, average rise in producer prices of 1.84% versus the April figure, with cumulative increase of 0.95% and 12.21% in the last 12 months. The beverage subsector registered one of the four major rises in May versus the previous month. Changes this month occurred due to the reorganization of prices after changes in the tax base of this sector, which has caused some rise of prices even before the official tax adjustment, according to the Soft Drinks Association. Another reason was the rise of raw material due to currency fluctuations. The price change in May was the fourth biggest influence on IPP.

In all the indicators, all the products recorded positive change, except for "beer and draft beer", which recorded negative change in terms of cumulative index in the year. Even so, in May, "beer and draft beer" wascontributed to increase of 1.84%, followed by "soft drinks" and "cachaca".

Pulp and paper: the sector had an average rise of producer prices (0.53%) in May 2015. With this performance, it reversed the April scenario, when there had been decrease of 1.06%. Since the beginning of the year, pulp and paper products have reached cumulative rise of 8.29% and of 17.71% in the last 12 months. The sector registered the fourth biggest cumulative increase of the index in the year due to the transfer of workforce costs and the rise of the dollar in the initial months of 2015. That certainly benefited the revenue from exports in this sector.

The main products accounting for the 0.53% rise in May were: "pulp", "paper for writing, printing and related uses, not covered iwht inorganic matter"; "uncoated kraft paper for packaging" and "notebooks". Together, the four products accounted for 0.47 percentage points of the sector results (0.53%). The influence of price change in IPP, in May, amounted to 0.02 percentage points.

Oil refining and ethanol production: after negative results in the beginning of the year, in May, for the second consecutive month, prices in this sector recorded positive change of 0.31% (versus 1.15% in April). That results in cumulative increase of -3.02% in the year and 0.40% in comparison with the same month in 2014.

The highlights among the biggest changes and influences were the same products ("basic lubricating oils", "aviation kerosene", "undenatured ethyl alcohol, with alcoholic level of 80% (anidrous or hydrated)" and "diesel or other fuel oils"), and two of them "the first one and the last one mentioned above) with positive change and two with negative changes.   Together, the influence of these products corresponded to 0.27 percentage points (0.31%).

From the perspective of the cumulative index in the year and in 12 months, the main influences cam from "naphthas" and "aviation kerosene", with negative changes. "Diesel and other fuel oils have influenced the two indicators, negatively for the cumulative in the year; positively, in the last twelve ones. In both cumulative results, the sectors contributed negatively to the sector.   Considering the cumulative index, the influence of -0.34 percentage points (2.65%) is significant and in M/M-12, -0.05 percentage points (by 6.10%) is the second biggest contributions - second to the -0.09 percentage points of optical, electronic and computer equipment.

Other chemicals

: chemical industry recorded negative change of 0.12%; after having reached a cumulative figure of 8.40% in the two preceding months. The cumulative index in the year was 3.02%, and in comparison with the same month in 2014, current prices are 4.81% higher, the second positive result in the year, after three negative consecutive figures for this type of index (versus the same month in the previous year).

The scenario of chemical industry as basic petrochemicals and intermediates for plasticizers, resins and fibers is very closely relatedassociated with international figures and naphtha prices, a product with significant fall of prices in the last 12 months. That helped counterbalance the costs associated with electricity, other types of raw material and the cumulative price of the dollar in 12 months, of about 38.0%.

In terms of influence, in the month versus the previous month, all the highlighted products are different from those recording change; two of them are associated with agricultural products (NPK-based manure or fertilizers" and "herbicides for use in agriculture"), both with negative change, and two related to naphtha, with positive results due to the recovery of prices of naphtha in April and May. These are: "non-saturated ethylene (ethene)" and "PEAD".

In the case of cumulative indexes in the year and in the last 12 months, the highlighted products are the same: only "non-saturated ethylene (ethene)" presents opposite results to the cumulative figures in the year "positive and in 12 months (negative). The other products are "NPK manure or fertilizers" and "polypropylene (PP)" with positive results and "non-saturated- propylene", with negative change.

Basic metals: when comparing prices in May versus April 2015, there was, for the second time in the year and consecutively, a negative change of 0.16%. As a result, the sector had a cumulative change in the last 12 months (M/M-12), a change of 7.79% ,and, cumulative in the year, of 2.49%.

As highlights in the change of prices, in the month-on-month comparison (M/M-1), negative changes were observed in "carbon steel ingots, blocks, rods or plates"; positive ones were recorded by "copper and copper alloy bars, profiles or square bars", "carbon steel wires" and "stainless steel coils or plates, including stripes". These last two products and "carbon steel ingots, blocks, rods or plates" were also a highlight in the month versus the immediately previous month. In terms of influence, the last product to be mentioned is "unwrought non-alloy aluminum", with a negative result.

Among the 22 selected products, the four highlights in the analysis by influence represents -0.35 percentage points of the change in the month, -0.16%.

As for the main influences in the cumulative result in the year and M/M-12, all the highlights recorded positive changes: "stainless steel coils or plates, including stripes" and "aluminum alloys" in the two comparison indexes; "carbon steel wires" only cumulative in the year and "unwrought non-alloy aluminum" in 12 months.

Optical, electronic and computer equipment: in May 2015, the prices for this activity, in relation to the previous month, changed by -2.80%, the biggest negative change among manufacturing industries. In the year, prices of this sector changed by - 4.94%. The cumulative change in the last 12 months reached -3.29%.

The influence of the monthly change observed on the overall index of manufacturing industry was - 0.07 percentage points. The most influential products in terms of monthly change  (M/M-1) were: “mobile telephones”, “television sets", “smart cards" and “PC desktops”.

Motor vehicles: in May,  the preices of the sector changed by 0.84% in relation to April, the second biggest reult in the year (in January, 1.33%). As a consequence, the cumulative index in the year reached 3.57%. in comparison Wirth the same period in 2014, the result of 8.61%, the biggest in the series, representes na upward series present since June 2014 (2.62%), which has the two highest rates M/M-1: 1,69%, in September 2014, and 1.33%, in January 2015.

The rise of 0.84%, 0.71 percentage points came from ositive changes in "flex-fuel, gasoline or ethanol passenger car with any engine power output", "pieces for motor vehicle engines", "diesel engines for trucks and buses", " and"chassi with engines for buses or trucks". It is worth mentioning that, among the four aforementioned products, the last two ones were highlights in terms of change.

The prices of "flex-fuel, gasoline or ethanol passenger car with any engine power output", in spite of the small change, were relevant to the result of the sector, given the price of this product in the calculation. Some companies have already started the models for 2016, which can explain the increase observed in May. On the other hand, in "diesel engines for trucks and buses", "the increase occurred due to currency, although the change, in May, was not as high as in previous months, it was about 16.0% in 2015.