Producer Price Index increases 1.27% in April

May 29, 2019 09h00 AM | Last Updated: June 05, 2019 09h29 AM

The prices of the overall industry changed 1.27% in April, a result below that reported in March (1.59%). In this same comparison, 22 out of the 24 activities recorded positive changes of prices, against 19 last month. The result had been 1.58% in April 2018. The cumulative index in the year reached 2.57% and, in 12 months, 8.61%. The support material of the release of the Producer Price Index is on the right side of this page.

Period RATE
April 2019 1.27%
March 2019 1.59%
April 2018 1.58%
Cumulative in the year 2.57%
Cumulative in 12 months 8.61%

The four biggest changes observed in April/2019 were among the products included in the following industrial activities: petroleum refining and ethanol products (3.18%), mining and quarrying (3.02%), basic metals (2.29% ) and furniture (2.12%).

Producer Price Indices, by Mining and Quarrying 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
FEB/19 MAR/19 APR/19 FEB/19 MAR/19 APR/19 FEB/19 MAR/19 APR/19
General Industry 0.45 1.59 1.27 -0.30 1.28 2.57 8.38 8.94 8.61
B - Mining and Quarrying 7.97 12.13 3.02 -0.23 11.87 15.25 22.02 31.09 28.83
C - Manufacturing Industries 0.15 1.13 1.19 -0.31 0.82 2.02 7.82 8.02 7.75
Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria

In terms of influence, in the comparison between April/2019 and March/2019 (1.27%) the highkughts were petroleum refining and ethanol products (0.33 pp), food (0.31 pp), mining and quarrying (0.14 pp) and metallurgy (0.14 pp).

The cumulative indicator in the year (April/2019 versus December/2018) reached 2.57%, against 1.28% in March/2019. Among the activities that had the greatest percentage changes in April/2019  are petroleum refining and ethanol products (16.09%), mining and quarrying industries (15.25%), other chemical products (-4.52%) and the manufacture of wearing apparel and accessories (4.06%). In this indicator, the sectors with the greatest influence were petroleum refining and ethanol products (1.50 pp), ming and quarrying industries (0.64 pp), other chemical products (-0.39 pp) and motor vehicles (0.16 pp).

In the cumulative indicator in 12 months (April/2019 versus April/2018), the price change reached 8.61%, against 8.94% in March/2019. The four largest price changes occurred in mining and quarrying industries (28.83%), petroleum refining and ethanol products (18.00%), other transportation equipment (13.13%) and tobacco (9.92%).

Among the major economic categories, in April, the 1.27% price change was distributed as follows: 0.79% in capital goods; 1.06% in intermediate goods; and 1.67% in consumer goods, of which 1.02% were observed in durable consumer goods and 1.81%, in semi-durable and non-durable consumer goods.

From the general industry result, 1.27%, the influence of the Major Economic Categories was as follows: 0.06 pp of capital goods, 0.58 pp of intermediate goods and 0.64 pp of consumer goods. In the case of consumer goods, 0.57pp was due to price changes in semi-durable and non-durable consumer goods and 0.07pp in durable consumer goods.

Concerning the cumulative index in the year (current month versus December of the previous year), industry price changes accumulated until April a change of 2.57%, of which 2.56% were in capital goods (with influence of 0.19 pp), 2.05% in intermediate goods (1.12 pp) and 3.33% in consumer goods (1.26 pp). In the latter case, the result was influenced by  the 0.17 pp for durable consumer goods and 1.09 pp for semi-durable and non-durable consumer goods.

Concerning the annual rate (M / M-12), the industry price change reached 8.61% in April, with the following changes: capital goods, 10.25%; intermediate goods, 9.28%; and consumer goods, 6.82%.

Producer Price Indices, by Mining and Quarrying and Manufacturing Industries (General Industry) and major Economic Categories - Last three months
General Industry and Sections Changes (%)
M/M-1 Cumulative in the year M/M-12
FEB/19 MAR/19 APR/19 FEB/19 MAR/19 APR/19 FEB/19 MAR/19 APR/19
General Industry 0.45 1.59 1.27 -0.30 1.28 2.57 8.38 8.94 8.61
Capital Goods (BK) 0.29 0.93 0.79 0.81 1.75 2.56 11.21 11.44 10.25
Intermediate Goods (BI) 0.68 1.59 1.06 -0.60 0.98 2.05 10.59 10.62 9.28
Consumer Goods (BC) 0.16 1.72 1.67 -0.09 1.63 3.33 3.94 5.36 6.82
Durable consumer goods (BCD) 0.18 -0.03 1.02 1.60 1.57 2.61 6.37 6.17 7.12
Semi- and non- durable consumer goods (BCND) 0.15 2.10 1.81 -0.46 1.64 3.48 3.35 5.10 6.65
Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria

The sector highlights were:

Mining and quarrying industries: In April, the prices of mining and quarrying industries changed by 3.02%. The cumulative indicator for the year was 15.25%. For the 12-month indicator, there was a change of 28.83% in relation to the same month of the previous year. The influence of the prices of the activities on the monthly change of the general industry was 0.14 pp in 1.27%. In relation to the cumulative index of the year, the influence on the general industry indicator was 0.64 pp in 2.57%. The products that most influenced the change of the month were "crude petroleum oil" and "iron ores and concentrates, raw or improved, other than pellets or sintered".

Food: the average price change of the sector, in the April-March comparison, was 1.40%, the highest of the year. As a result, for the first time in 2019, the cumulative index showed a positive result, 0.43%. Finally, in the comparison with the same month of 2018, the result of 6.47% was higher than that of March (6.25%), but lower than those of January (8.34%) and February (6.87% %). The highlight was the fact that it was the second biggest influence in the April-March result, 0.31 pp in 1.27%, behind only Petroleum refining and ethanol products (0.33 pp).

The highlights, in terms of products, are predominantly from the group slaughter and manufacture of meat products. Of the four products highlighted in terms of change and the four in terms of influence, only one, "frozen beef" appears in both cases. In addition, only one product, "VHP (very high polarization) sugar", which is a highlight in terms of influence, does not belong to the meat group. In the case of meat, the observed changes are in line with the greater foreign demand, in particular from China. The depreciation of the Real, of 1.3%, also had a positive impact on exports, which is the case of most of the highlights.

Petroleum refining and alcohol products: in the April-March comparison, industry prices changed 3.18%, a result that follows the 6.77% rate (March versus February). The cumulative change is 16.09% and the comparison of prices between April 2019 and April 2018 is 18.00%. It should be noted that in the series that started in January 2010, there has never been a cumulative rate in April as big as the current one; the second largest was that of April 2011, 6.13%.

All the highlights belong to the refining group, and "diesel oil", the most important product in the sector's calculation, appears as one of the most influential, but not as one of the largest changes ("fuel oils, except diesel" appears in change, but not in influence). The four most influential products, which can be seen in the following table, accounted for 2.98 pp, in 3.18%.

It is worth mentioning that the emphasis given to the activity was due to the fact that it appears first, in terms of change and influence, in the M/M-1 indicators (in the influence, 0.33 pp, in 1.27%) and cumulative indices (in influence, 1.50 pp, in 2.57%). And, in terms of change, it is the second in M/M-12 (the influence of this indicator can only be measured after December 2019).

Other chemicals: in April, the chemical industry showed an average price change of 0.49%, compared to March, the second consecutive positive change after a four-month succession of price falls (between November 2018 and February 2019). Even with this recovery in prices, the sector accumulated a change of -4.52% in the year and a positive change in the last 12 months of 6.28%, which is lower than the average result of the manufacturing industry, which was 7.75%.

The results observed in the month are closely linked to the international prices, which were influenced by the appreciation of the dollar against the real, of 1.3% in the month and 4.6% in the last two months, in addition to the prices of oil products, especially naphtha.

In relation to the four products with the greatest price change, all of them presented positive results, but none of them are among the four that most influenced the aggregate result, since they are products that do not stand out as being of great importance in the activity. The products are: "insecticides for domestic and/or industrial uses", "lysine and its esters; glutamic acid; salts thereof", "unsaturated polyester resin" and "xylene (O-xylene, m-xylene or p-xylene)".

In terms of products that most influenced the result, among the four most influential ones, two had negative changes ("NPK fertilizers" and "fungicides for agricultural use") and two, positive changes ("herbicides for agricultural use" and "unsaturated propene (propylene)". These four products were responsible for -0.22 pp, i. e., differently from the other 35 products that compose the activity, which together had a result of 0.71 pp in the final change of 0.49% of the sector.

Regarding the products that most influenced the cumulative index in the year, all the products had negative results: "NPK fertilizers", "Mineral or chemical fertilizers", "benzene" and "polypropylene (PP)".

Basic metals: when comparing average prices between April and March, there was a positive change of 2.29%, the greaest positive change since September 2018 and the second positive change in the last seven months. The result of the month was mainly due to products derived from steel - three products among the four with the most positive influences are part of the steel group, namely: "coils or sheets of galvanized steel, zinc plated", "stainless steel coils or sheets, including strips" and "carbon steel ingots, blocks, billets or plates". The only product not linked to steel which appears among the four influential highlights is "aluminum oxide (calcined alumina)". Together, these four products accounted for 1.88 pp, and the other 20 products, 0.41 pp.

Considering the results accumulated in the year, prices changed, throughout 2019, 0.56%, lower than the cumulative value of April 2018 (6.23%). In the 12-month period, the price change was 7.46% (the 30th consecutive positive change in this type of indicator).

Of the four products that stand out in terms of influence on the result of the cumulative index in the year, only two are also among the most influential in the month-on-month, they are: "galvanized steel coils or sheets , zinc plates" and "aluminum oxide (calcined alumina)." The others are the "carbon steel wire rod" and "pig iron", the latter with negative influence.

The behavior of the sector is influenced by the combination of the results of the steel groups (linked to the steel products) and the group of non-ferrous materials (copper, aluminum and gold), which have different price behaviors. The first group, related to the steel sector, is affected by the need to provide outflow for the Chinese steel after trading restrictions in other markets and by the fluctuation of iron ore values and the appreciation of the dollar against the real (14.4% in 12 months ). In relation to the second group - non-ferrous materials - prices usually present their results linked to international stock prices, more specifically the "London Metal Exchange".

Motor vehicles: in April, the change observed in the sector was 0.41%, when compared to the previous month, following the trend observed also in the previous four months. With this result, the cumulative change in the year and the cumulatice change in the last 12 months reached, respectively, 1.95% and 6.17%.

It is worthy highlighting that in the last 33 months, between August 2016 and April 2019, the sector presented positive results 31 times. Only in August 2017 (-0.08%) and November 2018 (-0.05%) did prices fall. In this period, the cumulative change was 16.59%.

The activity of motor vehicles stood out among all sectors surveyed, since it had the fourth cumulative influence in the year (0.16 pp in 2.57%) and because it is one of the sectors with the greatest weight in the calculation of the general indicator, with a contribution of 8.46%.

Among the four most influential products in the M/M-1, two of them exerted a positive impact on the index: "gasoline or bi-fuel passenger cars, of any displacement", which has the largest weight of the activity, and "tractor-truck for trailers and semi-trailers ". "Cables and electric harnesses for motor vehicles" and "road and transmission systems for motor vehicles" had a negative impact. The influence of the four products that most impacted the change of the month in relation to the previous month was 0.29 pp, that is, the other 19 products of the activity contributed with 0.12 pp.

As to the cumulative indicator in the year, all four products with the greatest influence on the index had a positive impact: "gasoline or bi-fuel passenger cars, of any displacement", "tractor truck, for trailers and semi-trailers", " ignition electronic devices" and "gasoline and/or ethanol vehicles for the transportation of goods, of cylinder capacity not exceeding 5 t".