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Producer Price Index changes 0.46% in December and closes 2017 at 4.18%

January 30, 2018 09h00 AM | Last Updated: March 05, 2018 12h36 PM

From November to December 2017, general industry prices changed by an average of 0.46%, lower than the change observed between October and November 2017 (1.40%). In the same comparison, 16 of the 24 industrial activities had a rise in prices. In the year and in the last twelve months, industry prices have risen by 4.18%.

Between November and December 2016, the IPP had increased by 1.29%. The complete publication and time series of the Producer Price Index are on the right of this page.

Period

Rate

December/2017

0.46%

November/2017

1.40%

December/2016

 1.29%

Cumulative in the year / 12 months

4.18%

In December, the prices of the mining and quarrying and manufacturing industries (general industry), changed on average 0.46% when compared to November, a lower percentage than the one seen in the comparison between November and October/2017 (1.40%). In the month, 16 of the 24 activities registered positive price changes against 20 in November. 

Producer Price Indexes, according to Mining and Manufacturing Industries (General Industry) and Sections - Last three months
General Industry and Sections Changes (%) 
M/M-1 Cumulative in the year M/M-12 
OCT/17 NOV/17 DEC/17 OCT/17 NOV/17 DEZ/17 OCT/17 NOV/17 DEC/17 
General Industry 1.80 1.40 0.46 2.27 3.71 4.18 4.42 5.04 4.18 
B - Mining and Quarrying Industries 9.41 -3.20 4.59 10.17 6.65 11.54 34.66 27.55 11.54 
C - Manufacturing Industries 1.51 1.59 0.30 1.97 3.60 3.91 3.47 4.33 3.91 
Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria         

The four biggest changes seen in December/2017 occurred with the products in the following industrial activities: mining and quarrying industries (4.59%), manufacture of wearing apparel and accessories (-4.44%), wood (1.38%) and electrical machinery and apparatus (1.24%).

In terms of influence, in the comparison between December and November/2017 (0.46%), the highlights were mining and quarrying industries (0.17 p.p.), petroleum refining and ethanol products (0.09 p.p.) basic metals (0.06 p.p.) and other chemicals (0.05 p.p.).

The cumulative indicator in the year – December/2017 against December/2016 – hit 4.18%, against 3.71% in November/2017. Among the activities that registered the biggest percentage changes in this indicator, the highlights were: petroleum refining and ethanol products (18.69%), basic metals (13.41%), pulp and paper (11.66%) and mining and quarrying industries (11.54%). In this indicator, the sectors of higher influence were: petroleum refining and ethanol production (1.88 p.p.), food (-1.56 p.p.), basic metals (0.99 p.p.) and other chemicals (0.85 p.p.).

Among the major economic categories, in December, the change of prices of 0.46% over November had the following distribution: 0.80% in capital goods; 0.74% in intermediate goods; and -0.08% in consumer goods: 0.29% in durable consumer goods and -0.20% in semi and non-durable consumer goods.

The influence of the major economic categories was: 0.07 p.p. of capital goods, 0.42 p.p. of intermediate goods and 0.03 p.p. of consumer goods. In the case of consumer goods, -0.05 p.p. was due to price changes observed in semi and non-durable consumer goods and 0.02 p.p. in durable consumer goods.

Producer Price Indexes, according to Mining and Manufacturing Industries (General Industry) and Major Economic Categories - Last three months 
General Industry and Sections Change (%) 
M/M-1 Cumulative in the M/M-12 
OCT/17 NOV/17 DEC/17 OCT/17 NOV/17 DEC/17 OCT/17 NOV/17 DEC/17 
General Industry 1.80 1.40 0.46 2.27 3.71 4.18 4.42 5.04 4.18 
Capital Goods (BK) 1.09 1.41 0.80 1.99 3.43 4.26 3.61 3.49 4.26 
Intermediate Goods (BI) 2.71 1.86 0.74 3.82 5.75 6.53 6.48 7.79 6.53 
Consumer Goods (BC) 0.51 0.66 -0.08 -0.07 0.60 0.51 1.42 1.20 0.51 
Durable Consumer Goods (BCD) 0.09 0.15 0.29 3.88 4.04 4.34 4.86 4.64 4.34 
Semi and Non-Durable Consumer Goods (BCND) 0.65 0.82 -0.20 -1.25 -0.43 -0.63 0.39 0.17 -0.63 
Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria         

In the cumulative index in the year (current month against December last year), the major economic categories had changes of: 4.26% in capital goods (with influence of 0.36 p.p.), 6.53% in intermediate goods (3.64 p.p.) and 0,51% in consumer goods (0.18 p.p.). In this last case, the result was influenced by durable consumer goods (0.36 p.p.) and by semi- and non-durable consumer goods (-0.17 p.p.).

The highlights in the result came from the following sectors:

Mining and quarrying industries: in December, prices of the activity advanced 4.59% in relation to November, culminating in the greatest monthly change seen among the activities of the general industry. With such a result, the cumulative indicator of the year of the mining and quarrying industries reached 11.54%. In the monthly change (M/M-1) the mining and quarrying activities presented the main influence seen for the general industry: 0.17 p.p. in 0.46%.

All the products analyzed in the activity presented a positive change in relation to the previous month, with a highlight to "iron ores". In the cumulative indicator of the year, the highlight went to the prices of "copper ores".

Food: in December, the average price change of the sector was of -0.19%, the ninth negative rate of the year, which is registered after two consecutive positive ones (October's, 0.89% and November’s, 0.35%) With December's result, for the first time in the time series started in December 2010, the change seen in the year was negative (-7.29%).

Despite the price drop in "UHT/Long Life/sterilized milk", other products that use milk as raw material, such as "ice cream, popsicles and edible ices" and "yogurt", were a positive highlight in price changes. In the case of "ice creams, popsicles and edible ices," the coming of the summer season, a period of greatest consumption, explains in part this increase. There is a consensus among the companies producing "yogurts" of a greater demand for the product. Among the most influential products, together with "sterilized / UHT / Long Life" milk, there are "refined cane sugar" with a negative sign, and, with a positive sign, "fresh or cooled beef" and "crystallized sugar". The four products had a joint influence of -0.03 p.p., in -0.19%, that is, -0.16 p.p. is the joint influence of the other 39 products.

Regarding the annual result of food (-7.29%), the negative contributions highlighted are due to the products "crystallized sugar", "refined soybean oil" and "wholly milled rice, parboiled or not" and positive to "concentrated orange juice". Good yields of sugarcane, soybeans and rice are the basis of the negative changes seen here.

In some cases, the largest production occurred not only in Brazil, but in other producing countries (as is the case of soybeans, with significant volumes in Argentina and the United States). The same happens with the crystallized sugar, although in the other countries the source of its production is not the sugar cane.

In the case of "concentrated orange juice", the depreciation of the real in recent months (5.0% in the last quarter, although, in the comparison December 2017 / December 2016, the real still accumulates an appreciation of nearly 2.0%) is at the basis of the price increase in the year.

Petroleum refining and ethanol products: the average change of the sector's price in December was of 0.82%, after having reached 5.89% in November. The December rate is the lowest positive one seen in a year along which seven rates were positive and five, negative. With the result of December, the cumulative rate of the year stood at the highest level of the series, 18.69%. Before that, the peak of the rate closing the year occurred in December 2013, 7.03%.

The four greatest influences ("ethyl alcohol - anhydrous or hydrated)", "LPG", "naphthas" and "diesel fuel and other fuel oils") added up to 0.45 p.p. (at 0.82%). But only one was negative, precisely due to the price change of "diesel fuel and other fuel oils", which, as a matter of fact, was the product of highest weight in the sectoral calculation (more than 50%). In the long run analysis, the petroleum products are those of greatest influence, all of them with positive changes.

Other chemicals: the prices in this sector changed, on average, 0.53%, the eighth positive price change of the activity in the year and the fourth in a row, making the level of cumulative prices along the year to stay at 9.19%. Although there is a rise, the level is still below that reached in 2015.

Those results are also seen in the light of international pressure in the prices of chemicals and their inputs. Products such as "ammoniac", used as the main input for the obtention of the nitrogen fertilizers, have presented a price rise in the last months (even becoming a highlight in the positive changes throughout the year), which explains in part the results for "manure or NPK fertilizers" – the biggest influence in the long-run analysis.

Among the highlights, in terms of influence, in December over November, there are two products with positive results and two with negative ones. In the group of positive results, "unsaturated ethylene" and "herbicides for agricultural purposes" and in the realm of negative changes of prices, "styrene-butadiene rubber" and "ammonium sulphate or urea". These four items accounted for an influence of 0.46 p.p. in the 0.53% change of the month.

In the cumulative index in the year, of the four products that most influenced the results (all of them with positive values), three are those of a greatest weight in the activity: "manure or NPK fertilizers", nearly 20%, "unsaturated ethylene", with 15% and "polypropylene", with almost 9%.

Basic metals: comparing the prices of December with those of November, there was a change of 0.74% - the ninth positive result in the year, which resulted in a high of 13.41% in 2017. For the long run changes, the figures represented the second biggest change in the general industry (mining and manufacturing).

In relation to the products that mostly influenced the results of the months against the previous month, all of them were positive, namely:  "copper and copper alloy bars, profiles and rebars", " stainless steel coils or plates, including strips", "tin sheets" and "carbon steels ingots, blocks, billets, or plates".

Considering the main influences in the analysis of the cumulative index in the year, all the results were positive, and the products in the spotlight are also those of greatest weight in the activity.

The behavior of the sector is influenced by the combination of the results of the steel groups (linked to steel products) and the group of non-ferrous materials (copper and aluminum), which, in turn, despite behaving differently, reached the highest positive results in the series this month. The first group, linked to the steel sector, is affected by the surplus in steel capacity in the world (despite production cuts in China coupled with price increases), and by the fluctuation of iron ore prices, which had a recovery in the second half of the year. In relation to the second group - non-ferrous materials - prices usually present their results linked to international stock markets.