In August 2022, industrial prices fell 3.11% against July. It was the biggest drop of the Producer Price Index (IPP) in the time series. The cumulative index in the year reached 7.91% and the cumulative index in 12 months, 12.16%.  In August, eight out of 24 activities surveyed registered positive price changes over the previous month.

The Producer Price Index - IPP of the Mining and Manufacturing Industries measures the evolution of the prices of products "at the factory gate", free from taxes and freight, and encompasses information by major economic category, i.e., capital goods, intermediate goods and consumer goods (durable and semi and non-durable).

In August 2022, industrial prices fell 3.11% against July. The four biggest changes were: mining and quarrying industry (-14.18%); petroleum refining and biofuels (-6.99%); basic metals (-3.91%) and food products (-3.74%). The greatest influence was Petroleum refining and biofuels, responsible for -0.95 percentage points (p.p.) of influence in the change of -3.11% of the overall industry. Other activities that stood out were food products (-0.88 p.p. of influence), mining and quarrying industries (-0.79 p.p.) and basic metals (-0.25 p.p.).

The cumulative index in the year reached 7.91% against 11.37% in July 2022.  The biggest changes were: petroleum refining and biofuels (26.49%), pulp and paper (14.45%), non-metallic mineral products (13.21%) and beverages (13.02%). The sectors that exerted the biggest influences were: petroleum refining and biofuels (2.95 p.p.), food products (1.60 p.p.), other chemicals (0.53 p.p.) and motor vehicles (0.52 p.p.).

The cumulative index in 12 months reached 12.16% against 17.94% in July.  The four biggest changes were recorded by: petroleum refining and biofuels (45.98%); mining and quarrying industries (-26.60%); other chemicals (25.71%); and manufacture of machinery and equipment (18.78%). On the other hand, the most influential sectors were: petroleum refining and biofuels (4.61 p.p.), food products (2.91 p.p.), other chemicals (2.29 p.p.) and mining and quarrying industries (-1.99 p.p.).

Among the major economic categories, price changes recorded the following results between August and July: -0.39% in capital goods (BK), -3.60% in intermediate goods (BI), and -2.79% in consumer goods (BC), being the change reported in durable consumer goods (BCD) of 1.13% and that in semi and non-durable consumer goods (BCND) of -3.50%.

The major influence among the major economic categories was exerted by intermediate goods, whose weight in the overall index was 58.79%, and it accounted for -2.13 p.p. of the -3.11% change in the mining and manufacturing industries..

Consumer goods (influence of -0.95 p.p.) and capital goods (-0.03 p.p.) completed the list. In the case of consumer goods, the influence was split into 0.06 p.p., for durable consumer goods and -1.01 p.p., for semi and non-durable consumer goods.

As for the cumulative index in the year, changes were 8.87%, for capital goods; 8.16%, for intermediate goods; and 7.29%, for consumer goods - with durable consumer goods having a cumulative change of 6.10% and semi-and non-durable consumer goods, with 7.52%.

Capital goods were responsible for 0.61 p.p. of the rate of 7.91% registered by the overall industry up to August this year. Intermediate goods, in turn, accounted for 4.79 p.p., and consumer goods for 2.51 p.p. in the aggregated result of industry, an influence shared by prices of durable consumer goods (0.34 p.p.) and semi-durable and non-durable consumer goods (2.17 p.p.).

The cumulative indicator in 12 months was 12.16% in August 2022. The change noticed in the price of capital goods was of 15.62%. The prices of intermediate goods, in turn, changed 12.17% in the period of one year and the change in consumer goods was of 11.47%, in which durable consumer goods changed 9.68% and semi and non-durable consumer goods, 11.81%.

Intermediate goods accounted for 7.16 p.p. of the rate of 12.16% of cumulative change in 12 meses in industry, in this month of reference. The result of August 2022 was also influenced by the rate of 3.96 p.p. from consumer goods and of 1.05 p.p. from capital goods. The result of consumer goods, in particular, was influenced in 0.54 p.p. by durable consumer goods and in 3.41 p.p. by semi and non-durable consumer goods, the latter with a weight of 84.01% in the index of this major category.

Mining and quarrying industries - the rate was negative (-14.18%) for the third month in a row, the lowest one since September 2021 (-16.48%). The cumulative indicator in the year changed from 26.61% in July to 8.65% in August. The cumulative index in 12 months recorded a negative rate (-26.60%), also for the third month in a row.

That sector stood out as its change was the most intense between July and August (all of them negative) and the second highest in the cumulative indicator in 12 months. In this case, it was the only negative change among the four highlights (“petroleum refining and biofuels”, “other chemicals” and “manufacture of machinery and equipment”). In terms of influence, it was the third in the monthly indicator (-0.79 p.p. out of -3.11%) and the fourth in the cumulative rate in the year (-1.99 p.p. out of 12.16%).

Food products - compared with July, the prices in August were, on average, 3.74% lower. It was the second negative change in the year (-0.19% in January). As a result, the cumulative index in the year retreated from 10.88% in July to 6.73% in August, a result 5.90 p.p. lower than that accumulated up to August 2021. Compared with the same month in 2021, prices in August were, on average, 12.44% higher. It is worth to say that, in this comparison, it was the lowest figure since February 2020 (11.94%).

That sector stood out as it registered the fourth biggest change (all of them negative). It also exerted the second biggest influence on the overall result: -0.88 p.p. in -3.11% in the monthly indicator; 1.60 p.p. in 7.91% in the cumulative index in the year; and 2.91 p.p. in 12.16% in the cumulative rate in 12 months.

In the comparison against the previous month, the major changes in August occurred in dairy products, like in July, though on the negative side. In terms of influence, four products stood out, all of them with negative changes (they accounted for -2.46 p.p. out in -3.74%), headed by “sterilized milk/UHT/long life milk”, whose prices were pressed by a lower demand, followed by “VHP sugar”, “frozen poultry and giblets” and “crude degummed soybean oil”. In the case of the last three products, the appreciation of the real against the dollar (4.2% between July and August; 9.0% in the cumulative index in the year and 2.1% in 12 months) was a factor that pressed the prices downward, though market factors (like the bigger supply of chicken or the lower demand for soybeans) also strengthen the movement.

Petroleum refining - It was the first negative change in the year (-6.99%) and the lowest one since April 2020 (-20.61%). The cumulative indicator in the year retreated from 36.00% in July to 26.49%. The cumulative index in 12 months reached 45.98%, 13.97 p.p. lower than that of July.

It stood out as the second most intense change in the monthly indicator and the first one (positive) both in the cumulative index in the year and in the cumulative rate in 12 months. It also exerted the major influence on the overall result: -0.95 p.p. in -3.11% in the monthly indicator; 2.95 p.p. in 7.91% in the cumulative index in the year; and 4.61 p.p. in 12.16% in the cumulative rate in 12 months.

The two products with the highest weight in the computation of that sector (“diesel fuel” and “gasoline, except for aviation”) negatively impacted the result of August against July, though the impact was still positive in the other indicators. In the case of “ethyl alcohol (anhydrous or hydrated)”, the influence was negative in the three indicators.

Other chemicals - The chemical industry recorded the fourth negative change in the year (-1.82%). An analysis by economic group showed that the month’s result was very unequally distributed among them, with “manufacture of inorganic chemicals” recording an average change of -2.70% in the month; “manufacture of resins and elastomers”, -6.85% and “manufacture of agrochemical products and disinfectants (for agriculture and other use), -0.25%.

The cumulative indicator in the year reached 5.22% and the groups of “manufacture of inorganic chemicals” and “manufacture of agrochemical products and disinfectants (for agriculture and other use)” reached 4.82% and 34.56%, respectively. On the other hand, “manufacture of resins and elastomers” changed -15.88% in the same indicator.

Concerning the results over the last 12 months, the group of inorganic chemicals stood out, especially influenced by the cumulative increase in the prices of manure/fertilizers. The prices changed 41.68% in that group, whereas “manufacture of agrochemical products and disinfectants (for agriculture and other use)” stayed at 44.64%. “Manufacture of resins and elastomers” changed -8.35% in 12 months%.

In the comparison with the 24 activities of the survey, this sector stood out as it registered the third highest price change in the cumulative index in 12 months, besides accounting for the third greatest influence on the cumulative index in the year and on the cumulative indicator in 12 months.

Basic metals - the prices in this activity changed -3.91%, the fifth negative change in the year. The sector accumulated -5.20% in the year and -4.29% in 12 months. The steel group reported a negative change for the sixth time in the year and for the ninth time in the last 12 months, reaching -4.98%.  As a result, in June, the cumulative index reached -2.68% in the year and -8.73% in the last 12 months.

The sector of basic metals stood out in the comparison with the 24 activities of the survey for having the third highest change in prices in the month and the fourth biggest influence in the August prices.

Vehicles - Having changed 0.64% in August, this sector registered the 26th consecutive positive figure, accumulating an increase of 31.87% in this period. It should be reminded that this sector has been affected by the increases in the electronic inputs, due to the semiconductor crisis. As a result, this sector accumulated a change of 7.71% in the first eight months of 2022. The cumulative change over the last 12 months was of 11.88%, the lowest figure in this indicator since January 2021 (11.65%). The activity of motor vehicles recorded the fourth biggest influence on the cumulative index in the year (0.52 p.p. out in 7.91%), as well as it was the fourth highest weight in the computation of the overall indicator, with a contribution of 6.72%.

The economic group surveyed in “manufacture of cars, pick ups and SUVs” changed 1.20% in August compared with July. Like the sector, this was the 26th consecutive positive figure in this indicator, with a cumulative index of 26.99% in this period. Also, the group has recorded a cumulative change of 6.58% in the first eight months of 2022, whereas it recorded 10.73% in the last 12 months.