In August 2017, the Producer Price Index (IPP) had a change of 0.31% in relation to July, above the value seen in the comparison between July and June this year (-1.01%). Among the 24 activities, 11 registered positive changes of prices, against six in the previous month. The cumulative indicator of the year reached -0.99%, against -1.29% in July 2017.

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 or 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.

In August, 11 out of the 24 activities registered positive changes of prices, against six last month. The four biggest changes occurred in: petroleum refining and ethanol products (6.48%), mining and quarrying industries (6.21%), toiletries, soaps and cleaning preparations (3.06%) and other chemicals (-2.06%).

In terms of influence between August and July 2017, the highlights were petroleum refining and ethanol products (0.64 p.p.), food products (0.33 p.p.), other chemical products (-0.20 p.p.) and mining and quarrying industries (0.19 p.p.).

In August, the cumulative index in the year (August 2017 against December 2016) was -0.99%, against -1.29% in July 2017. In this indicator, the activities that had the sharpest percentage changes were mining and quarrying industries (-11.72%), food products (-8.07%), non-metallic mineral products (-7.39%) and paper and pulp (5.40%).

In this same cumulative indicator, the sectors of highest influence were food products (-1.73 p.p.), mining and quarrying industries (-0.43 p.p.), basic metals (0.34 p.p.) and motor vehicles (0.32 p.p.).

In the comparison between August 2017 and August 2016, the price change was of 1.66%, against 1.09% in July/2017. The four biggest price changes occurred in mining and quarrying industries (14.47%), basic metals (7.57%), non-metallic mineral products (-7.52%) and food products (-6.54%).

Considering this indicator, the most influential sectors were: food products (-1.41 p.p.), petroleum refining and ethanol production  (0.64 p.p.), basic metals (0.56 p.p.) and motor vehicles (0.55 p.p.).

In August 2017, the price change of 0.31% against July occurred among the Major Economic Categories as it follows: -0.19% in capital goods; 0.00% in intermediate goods; and 0.91% in consumer goods, of which 0.08% in durable consumer goods and 1.18% in semi- and non-durable consumer goods.

The influence of the result on the general industry (0.31%) in the Major Economic Categories was: 0.02 p.p. of capital goods, 0.00 p.p. of intermediate goods and 0.32 p.p. of consumer goods. In the case of consumer goods, the 0.32 p.p. result was due to price changes observed in semi-and non-durable consumer goods and 0.01 p.p. in durable consumer goods.

As to the cumulative index over the year (current month against December last year), price changes of industry reached, until August, a change of -0.99%, of which the change of 1.26% is relative to capital goods (with influence of 0.11 p.p.), and of -1.17%, to intermediate goods (0.65 p.p.) and  of -1.24% to consumer goods (-0.44 p.p.). In the latter case, the result was influenced on 0.27 p.p. by durable consumer goods and on -0.72 p.p., by semi- and non-durable consumer goods.

In the annual rate, in August, the price change in the industry reached 1.66%, with the following changes: capital goods, 3.94% (0.34 p.p.); intermediate goods, 1.49% (0.83 p.p.); and consumer goods, 1.38% (0.49 p.p.); the influence of durable consumer goods was 0.36 p.p. and of semi- and non-durable consumer goods of 0.14 p.p.

Six sectors stood out in August

Mining and quarrying industries: registered a positive change of 6.21%, interrupting a sequence of price drops in the three previous months. The cumulative index in the year presented a change of -11.72%, becoming the main negative change in the indicators among the activities surveyed. In the comparison with August of the previous year, there was a positive change of 14.47%. Iron ores and natural gas were the highlights.

Food Products: in August 2017, the prices of the sector changed on average -1.62%, the seventh negative result in the year (the only positive one was in May: 0.40%) and the third lowest (January, -2.23%; July, -2.08%). With this result, the cumulative index in the year reached -8.07% (the last  month of August with a negative cumulative result was in 2014: -2.27%).

Among the products of greatest influence on the result of August, the highlights are crystallized sugar and refined cane sugar, sterilized milk/UHT/Long Life and soybean refined oil - the only product with a positive price change. Those four items accounted for -0.99 p. p. of the -1.62% rate.  Among the products with the biggest change of prices, there are some which use as raw material both sugar and milk and, consequently, had a negative price change. Such is the case of "condensed milk", "cocoa candies and chocolate" and "crystallized sugar" itself. The only products with a positive change of price were "ice cream, popsicle and frozen edible products".

In the case of sugar, the negative change of prices is also linked to the crops. Milk, in turn, besides having the greatest capture in the dairy farms, faces a decreasing demand (which also affects the derivatives, as "condensed milk"). In the case of "soybean oil", although the raw-material is declining, the increase is related exactly to a price recovery that occurred in the latest months.

Petroleum refining and ethanol products: the average change of prices of the sector, in the comparison August against July, was the highest in the series (6.48%) offsetting the cumulative index in the last year, which went from -3.17% to 3.11%. In the comparison with the same month of 2016, the rate of 6.45% is the biggest one since December 2014, 6.78%.

The four products that mostly influenced the results of the sector had a positive change of prices (influence of 6.16 p.p. on 6.48%), led by those of a greater weight in the calculation of the sector: "diesel fuel and other fuel oils" (weighting nearly 53%) and "motor gasoline" (16%). The change of prices in gasoline, particularly, explains to a great extent the rise of prices of "ethyl alcohol (anhydrous or hydrated)", especially the one used as fuel.

Other chemical products: the prices of the sector changed on average -2.06%, the lowest result since August 2016 (-2.60%). In the year, it is the fourth negative result and, from then on, the cumulative index of the year suffered an inversion, from 1.51%, in July, to -0.59%. It was the first time since December 2016 (-12.28%) that the cumulative index was negative. Those negative results should be seen in the light of a recent appreciation of the Real, which reached 4.4%, in the comparison between August and June. An important product, "manure or NPK fertilizers", has its price linked to the prices charged abroad, since the domestic supply is limited. In the comparison with the same month in 2016, the rate of 0.38% was the first positive one since April (0.01%). All in all, in this comparison, since January 2016, of the twenty results, just six were positive.

Basic metals: comparing the prices of August to July, there was a change of -1.15%, the third negative result in the year seen in consecutive months. This way, the sector accumulates a change of 4.58% and, in the last 12 months, of 7.57%, becoming the greatest change observed in the sectors of the manufacturing industry. In a simple comparison, in August 2016, the sector of basic metals recorded a positive change of 2.55% in the cumulative index over 12 months.

In relation to the products that mostly influenced the results of the month against the previous month, there are two of greater weight in the activity, all of them with negative results, namely: "carbon steel ingots, blocks, billets or plates" and "unwrought non-alloy aluminum". The other two products that mostly influenced the monthly indicator presented positive results: "carbon steel wires" and "copper and copper alloy bars, profiles and rebars".

Among the 22 selected products for the survey, the four with a highlight in the analysis of month-on-month influences, previously mentioned, represented
-1.11 p.p. of the monthly change, i. e., the other 18 products had an influence of -0.04 p.p.

Motor vehicles: in August, the change seen in the sector was of -0.09%, when compared to the previous month, breaking a sequence of 12 positive changes in a row in the activity, which had been showing positive results in the indicator since August 2016. As a consequence, the cumulative index of the year (2.98%) presented the second biggest positive change for the month of August since the beginning of the time series, standing just behind August 2015 (4.50%). Comparing the results, in August 2016, the cumulative index was 1.80%. In the last 12 months, the sector accumulated a change of 5.09%.

Besides being one of the biggest weights in the sector in the calculation of the general index (just behind the food sector), the activity of motor vehicles also stood out, among all the sectors surveyed, in two other indicators: it presented the fourth biggest influence in the cumulative change in the year (0.32 p.p. in -0.99%) and the fourth biggest influence in the cumulative change in the last 12 months (0.55 p.p. in 1.66%).

Among the four products of greatest influence in the comparison with the previous month, "chassis with engine for buses or trucks" and "diesel and semi-diesel engines for buses and trucks") had a positive impact on the index. Two other products had a negative impact on the indicator: "injection pumps for motor vehicles" and "bodies for buses". However, none of those products was among the biggest weights in the sector. Those four products contributed with -0.05 p.p. to the monthly change of -0.09%, whereas the other 21 products of the activity contributed with -0.04 p.p.