Producer Price Index (IPP) increased by 5.22% in February

March 30, 2021 09h00 AM | Last Updated: March 31, 2021 04h15 PM

In February 2021, industry prices rose 5.22% against January, with a record in three indicators. That is the second record in a row, after the January revision and the main increase in the time series initiated January 2014. The cumulative index up to February reached 8.95%, highest percentage for the period and surpassing the highest cumulative increase registered so far, of 1.83%, in February 2014. Cumulative index in 12 months (28.58%) was a record figure as well. In February, 23 of the 24 activities rose, just like in January.

Period Rate (%)
February 2021 5.22
January 2021 3.55
Cumulative in the year 8.95
Cumulative in 12 momths 28.58
February 2020 0.81

The Producer Price Index (IPP) for Mining and Quarrying and Manufacturing Industries measures the evolution of 'factory gate' prices, excluding taxes and freight, and covers information from Major Economic Categories, that is, capital goods, intermediate goods and consumer goods (durable, semi-durable and non-durable).

Producer Price index, 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
DEC/20 JAN/21 FEB/21 DEZ/20 JAN/21 FEB/21 DEC/20 JAN/21 FEB/21
General Industry 0.39 3.55 5.22 19.38 3.55 8.95 19.38 23.19 28.58
B - Mining and quarrying industry -1.01 12.03 27.91 45.75 12.03 43.30 45.75 54.74 87.59
C - Manufacturing industry 0.48 3.05 3.78 18.14 3.05 6.95 18.14 21.62 25.50
Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria        

In February 2021, industry prices rose 5.22% against January 2021, the biggest increase in the time séries for this indicator, initiated January 2014. The four biggest changes were those in mining and quarrying industry (27.91%), oil refining nas alcohol products (12.12%), other chemicals (9.69%) and basic metals (8.35%).

The biggest influences were those from: mining and quarrying industry (1.66 p.p.), oil refining and alcohol products (1.04 p.p.), other chemicals (0.79 p.p.) and basic metals (0.56 p.p.).

The cumulative index in the year reached 8.95% and was the new record for a month of February in the time series, surpassing the previous record (1.83%) of February 2014. Among the activities, the biggest changes came from: mining and quarrying industry (43.30%), oil refining and alcohol products (18.04%), other chemicals (15.03%) and basic metals (14.99%). The most influential sectors were: mining and quarrying industry (2.38 p.p.), oil refining and alcohol products (1.52 p.p.), other chemicals (1.20 p.p.) and basic metals (0.98 p.p.).

As for the cumulative index in 12 months, the price change was of 28.58% (one more series records), versus 23.19% in January/2021. The four main rises were those of mining and quarrying industry (87.59%), basic metals (45.90%), other chemicals (40.81%) and wood (39.74%).

The most influencial sectors were: food products (7.87 p.p.), mining and quarrying industry (4.34 p.p.), other chemicals (3.15 p.p.) and basic metals (2.79 p.p.).

The 5.22% price from January was subdivided as follows among major economic categories: 0.26% from capital goods; 7.96% from intermediate goods; and 1.94% from consumer goods, with 1.49% from durable consumer goods and 2.03% from semi and non-durable goods.

The influence of major economic categories on IPP (5.22%) was: 0.02 p.p. from capital goods, 4.50 p.p. from intermediate goods and 0.70 p.p. from consumer goods, with 0.09 p.p. from durable consumer goods and 0.61 p.p. from semi and non-durable goods.

As for the cumulative index in the year, changes in industry prices hit 8.95%, with 3.98% for capital goods (and a share 0.29 p.p.), 13.47% for intermediate goods (7.50 p.p.) and 3.13% for consumer goods (1.16 p.p.). In this last case, the result had 0.23 p.p. contribution from durable consumer goods and a 0.93 p.p. contribution from semi and non-durable goods.

Producer Price Index, by Mining and Quarrying Industry and Manufacturing Industry (General Industry) and Major Economic Categories - Last three months
General industry and Sections Changes (%)
M/M-1 Cumulative in the year M/M-12
DEC/20 JAN/21 FEB/21 DEC/20 JAN/21 FEB/21 DEC/20 JAN/21 FEB/21
General industry 0.39 3.55 5.22 19.38 3.55 8.95 19.38 23.19 28.58
Capital goods (BK) -1.11 3.72 0.26 16.15 3.72 3.98 16.15 18.72 18.02
Intermediate goods (BI) 0.51 5.10 7.96 24.41 5.10 13.47 24.41 29.05 37.90
Consumer goods (BC) 0.53 1.17 1.94 13.12 1.17 3.13 13.12 15.84 17.51
Durable consumer goods (BCD) 0.83 2.24 1.49 11.30 2.24 3.76 11.30 13.15 14.49
semi-durable and non-durable consumer goods (BCND) 0.47 0.95 2.03 13.49 0.95 3.00 13.49 16.41 18.14
Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria 

In comparison with February 2021/February 2020, the change of prices in industry reached 28.58%, as follows: capital goods, 18.02% (1.36 p.p.); intermediate goods, 37.90% (20.50 p.p.); and consumer goods, 17.51% (6.72 p.p.), with 0.96 p.p. from durable consumer goods and 5.76 p.p from semi-durable and non-durable goods.

See the highlights below:

Mining and quarrying industry: in February, prices of the sector changed, on the average, by 27.91%, main increase in the series, surpassing the 19.60% of December 2016. As a result, cumulative change in the year reached 43.30%, highest result for a month of February and the cumulative index in the year was 87.59%,highest figure in the series.

The sector stood out for recording the main changes in terms of monthly, cumulative in the year and cumulative in 12 months figures. It also accounted for the main influence on the monthly indicator (1.66 p.p., out of 5,22%), cumulative, (2.38 p.p., out of 8,95%); and the second main influence cumulative in 12 months (4.34 p.p., out of 28.58%). The fourth main contribution to the results of mining and quarrying and manufacturing industry sectors is 7.23%.

Food products: in February, prices of the sector, compared to the previous month, increased, on the average 1.22%, and had a positive rate as in January (1.49%) but to a lower extent. As a result, the cumulative index in the year reached 2.73%, a result above that of February 2020, 0.10%, and the second among figures in the months of February (only second to the result of February 2010, 4.05%). Compared to February 2021/February 2020, current prices were 33.83% higher than in February 2020. Also, in this type of comparison, since September 2020 (32.51%), the change has surpassed 30%.

The sector accounted for the main influence on the cumulative index in 12 meses (7.87 p.p., out of 28.58%), besides representing the main contribution to the calculation of overall mining and quarrying industry and manufacturing industry, 24.22%. The main products regarding this indicator were “residue from soybean extraction” (third biggest increase, 8.74%), “fresh or cooled beef” (biggest contribution, 12.59%), ”crude soybean oil” (seventh biggest, 4.42%) and “ VHP sugar” (fourth biggest increase, 8.32%). The four changes were positive.

In relation to groups opened in the sector, the highest biggest change was that of “sugar reduction and refining”, 5.92%, which is the second highest in the series (second to July 2020, 6.04%). In turn, “dairy products”, for the second month in a row, is the only group with a negative change (-3.67%, in January, and -2.84%, in February). In terms of the cumulative index in 12 months, the biggest change was that of “manufacture of vegetable and animal oils and fats”, 75.89%, but prices of “grinding, manufacture of starchy products and animal food” also changed above the sector avrerage, 37.67%, that is, in these two activities price changes were above thodr in the food sector, 33.83%.

Wood: in February, wood industry remained among the highlight of minig and quarrying industry and manufacturing industry, in terms of abolute price change, against the same month a year ago. The cumulative rate in 12 months for the sector was 39.74%. That figure surpassed the 37.0% of January, which was then the fifth consecutive record as highest indicator in this time series.

In February, prices of the sector remained affected by the effect of currency on prices of exportable goods (in a scenario of cumulative currency depreciation) and by the increased international demand in the market of laminate and plywood and carpentry products. Before January, prices for the activity rose 4.46%, with a cumulative increase of 9.22% in the year.

The most influential products to the month's result were: “plywood and smilar items”; “wood fiber panels”, “sawed, planed or polished wood” e “and wood profiles and frames”, all of which had higher prices in February and amounted to 3.75 p.p. in the change of 4.46% from January.

Oil refining and alcohol products: in February, prices of the secotr rose 12.12%, thus keeping positive results since October 2020 (2.35%). The result of February is above the four previous ones, and it is 6.84 p.p. above that of January. in the series, it is the second one, after that of June 2020 (17.16%). In terms of cumulative figures, the change was of 18.04%, the highest observed in the same month in the series. In terms of cumulative figures in 12 months, change was of 18.26%, first positive result after 11 months in a row. with that result, the sector reached the highest level in the index-number series, 134.19, and surpasses the previous level of January 2020, 121.15.

A highlight given to the sector was due to the fact it accounted for the second biggest change in the monthly indicator and cumulative result; second main influence on monthly results (1.04 p.p., ou of 5.22%), and cumulative figures in the year (1.52 p.p., out of 8.95%); besides accounting for the second main contribution to the result of overall industry, 9.13%.

Among the highlights in the result, biggest changes came from petroleum products, and, among the most influential products is "ethyl alcohol (anidhrous or hydrated)". It is worth mentioning that "naphthas" stand out in terms of change, but not of influence. Anyway, the most influential products accounted for 11.26 p.p., in that 12.12% change.

Other chemicals: in February, industry prices had a change of 9.69%, eighth increase in a row and biggest positive change in the entire series for the activity. That way, the sector has a cumulative increase of 40.81% in the last 12 months and of 15.03% in two months, both highest figures in the series.

Results observed in the last 12 onths are mainly related to international prices and to the rise of raw material - either imported or not - such as naphtha, mainly due to the depreciation of dollar throughout the year, which reached 1.1% in the month and 24.8% in the last 12 months.

As for economic groups of activity, hoghlights were changes in “manufacture of resins and elastomers”, with 13.30% in the month, resulting in a cumulative change of 80.12% in 12 onths and “manufacture of chemical inorganic products”, with a change of 11.23% in the month and 39.16% between February 2020 and February 2021. Considering “manufacture of agricultural dfensives and sanitation products for domestic use”, figures were 3.23% in the month and 16.80% in 12 months.

Among the four most influentaial products in terms of monthly results (4.72 p.p. out of 9.69%), there was price rise in all of them "NPK manure and fertilizers”, “non-saturated propene (propylene)”, “polypropylene (PP)” and “phosphated, mineral or chemical manure or fertilizers”. These four items are the same highlights as in January. So, 4.97 p.p. is the contribution from the other 35 products in this activity.

Basic metals: from January, there was an increase by 8.35%, eighth positive rate in a row for this activity. As a result, the sector of basic metals had, in the last 12 months, a cumulative change of 45.90% and, in the first two months of the year, 14.99%. The monthly and cumulative changes registered highest figures in the entire IPP history, initiated January 2010. Another highlight is that, between December 2018 (base for the current series) and January 2021, prices of the sector had a cumulative change of 51.90%, being only second to the change in prices in mining and quarrying industry, 137.25%.

Results of the last 12 months are related to the combination of results of steel products and of non-ferrous material (copper, gold and aluminum), which have different price behaviors. The first one, as part of the steel sector, is affected by the prices of iron ore and by the exceeding iron production worldwide. In spite that exceeding output, dollar appreciation over real in the last 12 months was 24.8% and in the month 1.1, and also the rising prices of iron ore, led to a rise of national steel prices. As for the second group, non-ferrous material - figures are usually related to prices in the international stock market.

Considering economic groups, the steel segment had a change of 12.12%, reaching, thus, a cumulative 18.14% in two months and 53.73% in 12 months, being the three figures above the average for the activity. From the perspective of four groups accounting for major influence on the month’s result, figures were 3.77 p.p., and 4.58 p.p. in the other 20 products analyzed.

The steel segment was a highlight, versus the 24 activities in the survey, for recording the fourth biggest change in prices in the month and in two months, besides the second biggest influence on the cumulative result in 12 months. As for influence, the activity was – in the month, in two months and cumulative in 12 months – the fourth main one among all mining and quarrying and manufacturing industry.