In December 2013, the Producer Price index (IPP) recorded a 0.65% change over the previous month, a result which was close to that recorded in the November/13 and October/13 comparison (0.64%). The cumulative indicator in 2013 (and in 12 months, consequently) closed at 5.75%. This index was above the cumulative one in the previous twelve months (November), which reached 5.06%.

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

17 of the 23 activities surveyed recorded rise of prices

In December 2013, 17 of the 23 activities surveyed recorded price rise, versus 16 activities in the previous month. The four main changes occurred among the products included in the following activities of industry: oil refining and ethanol production (2.97%), Computer, electronic and optical products (-2.77%), Other chemical products (2.35%) and Footwear and leather articles (1.82%). The most influential items were oil refining and alcohol production (0.32 percentage points), Other chemical products (0.26 percentage points), Metallurgy (-0.13 percentage points) and Computer, electronic and optical products (-0.08 percentage points).

The cumulative indicator in the year (December/13 versus December/12) reached 5.75%, versus 5.06% in November/13. Among the activities with the biggest percent changes, the highlights were tobacco (14.69%), footwear and leather articles (10.87%), pulp and paper (8.85%) and beverages (8.63%). The main sectors were food products (2.68 percentage points), other chemical products (1.03 percentage points), petroleum refining and alcohol products (0.67 percentage points) and basic metals (0.44 percentage points).

Food: in December, the prices of food products changed, on the average, 0.35%. As a result, the sector had cumulative positive change of 6.84% in 2013, being below the 2012 figure (14.86%). The most influential items in December 2013 were: "sterilized/UHT/carton milk", "fresh or chilled beef", "residue from soybean extraction" and "concentrated orange juice", which represented 0.05 percentage points of the 0.35% rate. 

Oil refining and ethanol production: the activity recorded change of 2.97% % in December in relation to November 2013, reversing the downward trend observed in the last few months. In the composition of the overall manufacturing industry index, the sector had a contribution of 0.32 percentage points. The result of December caused the index to close the year with cumulative hike of 7.07%, the seventh position among the main changes by sector of 2013. In November/13, the cumulative indicator in the year was 3.98%, and it remained among the lowest positive changes.

Both in terms of the December result as those of 2013, "diesel and other fuel oils" and "gasoline", "ethyl alcohol (anidrous or hydrated)" and "naphthas" were highlights in terms of influence. The influence of these four products reached 2.84 percentage points in the total 2.97% of the sector index. 

Other chemical products: with the rise of 2.35% in December 2013 - the second biggest result in the year (in July it was 2.78%) - after two months of decrease of the monthly index, the sector recorded cumulative increase of 5.45% in 2013, the smallest figure in the series which started in 2010.

The four higfhlights in terms of influence in comparison with the previous month were: "non-saturated propene (propylene)", "ammonium sulphate or "urea", "non-saturated ethylene (ethene)" and "NPK-based manure or fertilizers". These four products accounted for 1.94 p.p. of the change of 2.35%. 

Basic metals: the December result was -1.60%, the third decrease in the last four quarters in the year. As a result, the cumulative index changed from 7.48%, in November, to 5.76%, which is still the biggest result recorded in this type of comparison, since the beginning of the series in 2010.

In December, the four products accounting for the main contributions were "uncoated hot carbon steel bobbins; "tinplates", "aluminum alloy in raw- forms" and "carbon steel ingots, blocks, rods or plates". These products accounted for -1.77 percentage points, that is, the other 18 products of this activity contributed with only 0.17 pp to the monthly result. 

Computer, electronic and optical products: in December 2013, the sector recorded fall of prices from 2.77% versus November figures, inverting the positions observed last month. The cumulative index in the year recorded negative change of 1.44%, being below the cumulative figure of 2012 (positive change of 3.32%). The four biggest influences were "computers", "electricity gauges", "mobile telephones" and "smart cards", which accounted for -2.68 percentage points. 

Result of 2013 is the second smallest one since 2010

Between 2010 and 2013, the prices of manufacturing industries increased, on the average, 25.76%. However, the biggest increase occurred in 2010 (8.04%), year of recovery from the crisis of 2008/2009, with special pressure and direct impacts on the sector Food products (21.24%). In 2012 and 2013, differently from 2010, the exchange effect strongly influenced the final result. In 2010, there was valuing of Real by 3.3%, whereas in 2012 the decrease of valuing was 13.1% and, in 2013, 12.9%. 

Thus, rises of 2010 were related to the reaction of prices due to a bigger demand, also in the world economic order, which led to the rise of commodities exported by Brazil. It is important to observe, in the year, that the bigest hikes were recorded by Food products, Textiles (as a result of the rise of cotton in the foreign market) and Other chemicals. In 2013, Tobacco is the leader in terms of price rises (due to currency value and to changes effected in this sector) followed by Footwear and leather articles and Pulp and paper, benefited by currency devaluation. 

When the level of influence is considered, Food products, despite being in the 10th position in terms of change in 2013, remains, as in 2010, in the first place concerning influence. It is also worth mentioning, that in terms of influence on the two ends of the series, the exchange of position between the sectors of Oil refining and ethanol production and Other chemical products. This item, in 2010, was the second most influential one and became the third in 2013, facing the opposite compared to the oil and alcohol sector. However, when changes are concerned, 2013 was the only year when priced of the chemical sector changed less than those of oil and alcohol. The change of 2.97% registered by prices of Oil refining and alcohol production, in December versus November, was the biggest one among all the activities which form manufacturing industries, and, as a result, the cumulative index in the year (7.07%) was above the average (5.75%).

This sector, which usually faced price changes placing it among those with the smallest changes (21th in 2010 and 19th in 2013), Motor vehicles grew significantly in terms of influence, leaving the 22nd position and reaching the 5th one. This change occured at the same time, in 2013, the sector reached its highest level (3.23%).