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Producer Price Index (IPP) stays at -0.85% in October

November 29, 2022 09h00 AM | Last Updated: November 30, 2022 02h35 PM

The industrial prices fell 0.85% in October 2022. The cumulative index in the year reached 5.04% and the cumulative index in 12 months, 6.50%.  In October, 12 out of 24 activities surveyed registered positive price changes over the previous month.

Period Rate (%)
October 2022 -0.85
September 2022 -1.89
Cumulative in the year 5.04
Cumulative in 12 months 6.50
October 2021 2.26

The industrial prices fell 0.85% in October 2022. The cumulative index in the year reached 5.04% and the cumulative index in 12 months, 6.50%.  In October, 12 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).

Producer Price Index, according to Mining and Manufacturing Industries (Overall Industry) and Sections, Brazil, last three months
General Industry and Sections Change (%)
M/M₋₁ Cumulative in the year M/M₋₁₂
Aug/2022 Sep/2022 Oct/2022 Aug/2022 Sep/2022 Oct/2022 Aug/2022 Sep/2022 Oct/2022
General Industry -3.04 -1.89 -0.85 7.99 5.95 5.04 12.24 9.84 6.50
B - Mining and Quarrying Industries -14.18 -3.82 -3.44 8.65 4.50 0.90 -26.60 -15.48 -16.56
C - Manufacturing Industries -2.38 -1.79 -0.72 7.95 6.02 5.26 15.39 11.53 7.96
Source: IBGE, Diretoria de Pesquisas, Coord. de Estatísticas Conjunturais em Empresas

Industrial prices fell 0.85% in October 2022 over September, a less intense change than that between September and August (-1.89%). The four highest changes in October were in  other chemicals (-4.58%), mining and quarrying industries (-3.44%), wood (-2.39%) and petroleum refining and biofuels (-1.40%).

The industrial sector that mostly stood out in the composition of the aggregate result was that of  other chemicals, accounting for -0.44 percentage points (p.p.) of influence on the change of -0.85% of the overall industry. Still in this issue, other activities that also stood out were petroleum refining and biofuels, with -0.17 p.p. of influence, mining and quarrying industries (-0.17 p.p.) and food (-0.10 p.p.).

The cumulative index in the year reached 5.04% against 5.95% in September 2022.  As a comparison, the cumulative rate up to October 2021 had been 26.69%. The highest changes in the cumulative index in October 2022 were in pulp and paper (17.54%), petroleum refining and biofuels (16.26%), printing (15.81%) and wearing apparel (14.77%). The major influences were registered in petroleum refining and biofuels (1.81 p.p.), food products (1.28 p.p.), basic metals (-0.67 p.p.) and motor vehicles (0.58 p.p.).

The cumulative index in 12 months reached 6.50% against 9.84% in September. The four highest changes were: petroleum refining and biofuels (23.00%), printing (19.94%), beverages (18.37%) and manufacture of machinery and equipment (17.01%). On the other hand, the most influential sectors were: petroleum refining and biofuels (2.45 p.p.), food products (1.90 p.p.), mining and quarrying industries (-0.99 p.p.) and basic metals (-0.95 p.p.).

The change of -0.85% in relation to September had an impact on the major economic categories as follows: capital goods, 0.78%; intermediate goods, -1.66%; and consumer goods, 0.19%, with 0.39% observed in durable consumer goods and 0.15% in semi and non-durable consumer goods.

The major influence among the major economic categories was exerted by intermediate goods, whose weight in the overall index was 58.03%, and it accounted for -0.97 p.p. of the -0.85% change in the mining and manufacturing industries..

Consumer goods (influence of 0.06 p.p.) and capital goods (0.06 p.p.) complete the list. In the case of consumer goods, the influence was split into 0.02 p.p., for durable consumer goods and 0.04 p.p., for semi and non-durable consumer goods.

Producer Price Index, according to Mining and Manufacturing Industries (Overall Industry) and Major Economic Categories, Brazil, last three months
General Industry and Major Economic Categories Change (%)
M/M₋₁ Cumulative in the year M/M₋₁₂
Aug/2022 Sep/2022 Oct/2022 Aug/2022 Sep/2022 Oct/2022 Aug/2022 Sep/2022 Oct/2022
General Industry -3.04 -1.89 -0.85 7.99 5.95 5.04 12.24 9.84 6.50
Capital Goods (BK) -0.36 0.58 0.78 8.90 9.53 10.39 15.65 14.84 13.63
Intermediate Goods (BI) -3.54 -2.35 -1.66 8.23 5.69 3.93 12.24 10.21 5.18
Consumer Goods (BC) -2.70 -1.60 0.19 7.39 5.68 5.88 11.57 8.26 7.34
Durable Consumer Goods (BCD) 1.28 0.30 0.39 6.25 6.57 6.99 9.84 9.57 8.52
Semi and Non-durable Consumer Goods (BCND) -3.42 -1.96 0.15 7.61 5.51 5.67 11.91 8.01 7.12
Source: IBGE, Diretoria de Pesquisas, Coord. de Estatísticas Conjunturais em Empresas

As for the cumulative index in the year, changes were 10.39%, for capital goods; 3.93%, for intermediate goods; and 5.88%, for consumer goods - with durable consumer goods having a cumulative change of 6.99% and semi-and non-durable consumer goods, with 5.67%.

The major influence was intermediate goods, which accounted for 2.30 p.p., followed by consumer goods, which exerted an influence of 2.03 p.p. on the aggregate result of industry, being 0.39 p.p. related to the prices of durable consumer goods and 1.64 p.p. of semi and non-durable consumer goods. Lastly, capital goods were responsible for 0.71 p.p. of the rate of 5.04% registered by the overall industry up to October this year.

The cumulative index in 12 months was 6.50% in October 2022. The price change of capital goods was of 13.63% in October 2022. The prices of intermediate goods changed 5.18% in a year and consumer goods, 7.34%, with durable consumer goods changing 8.52% and those of semi and non-durable consumer goods, 7.12%.

Concerning the influences on the aggregate result, intermediate goods, with a weight of 58.03% in the overall index, accounted for 3.05 p.p. in 6.50% of cumulative change in 12 months in industry, in the reference month. In the result of October 2022, consumer goods influenced 2.53 p.p. (0.47 p.p. in durable consumer goods and 2.06 p.p. in semi and non-durable consumer goods) and capital goods, 0.92 p.p.

Mining and quarrying industries - The prices in this sector dropped in relation to the previous month for the fifth month in a row. In October, the change was -3.44%. In five months, the drop was of 22.80%. In the cumulative indicator in the year, the change was of 0.90% (it was 37.66% in the previous year) and, in the cumulative index in 12 months, of -16.56%, once again the fifth month with negative figures in this perspective. This sector stood out as it recorded the second most intense change in the monthly indicator and the third biggest influence both in the monthly indicator (-0.17 p.p. in -0.85%) and in the cumulative rate in 12 months (-0.99 p.p. in 6.50%). In terms of products, it is worth noticing that among the major influences in the M/M-1 perspective, the change in “crude petroleum oil” was positive, the only one among them.

Food - The prices in this sector changed -0.41%, recording the third consecutive month of negative changes. No period of negative changes above two consecutive months was registered since 2017 (firstly between January and April and then between June and September). The cumulative index in the year retreated from 5.82% in September to 5.39%, 10.31 p.p. lower than that registered in October 2021. In the cumulative rate in 12 months, the change was 8.08% in October, recording a downward series since July 2022 (when it was 19.55%). This sector stood out due to the influence on the result of the overall industry. Its influence on the monthly indicator was the fourth one (-0.10 p.p. in -0.85%); in the cumulative rate in the year, the second one (1.28 p.p. in 5.04%); and in the cumulative indicator in 12 months, the second one (1.90 p.p. in 6.50%).

The four products with the biggest influence in October added up to -0.25 p.p. in -0.41%. Two influences were negative (“frozen poultry and giblets” and “crude degummed soybean oil”) and two, positive (“residue of soybean oil extraction” and “VHP sugar”).

Petroleum refining - The prices in this sector changed -1.40%, the third negative figure in a row. In these three months, the price retreat was of 14.51% and the cumulative index in the year hit 16.26% (against 60.40% in the same month a year ago). In the cumulative rate in 12 months, the change was of 23.00%, the lowest one since February 2021 (18.25%). This sector stood out due to the fact that it registered the fourth most intense change in the monthly indicator among all sectors that comprise industry, as well as the second one in the cumulative rate in the year and the fist one in the cumulative indicator in 12 months. The difference was that the change was negative in the monthly rate and positive in the cumulative indicator in the year and in 12 months. In terms of influence, it was the second in the monthly indicator (-0.17 p.p. in -0.85%) and the first in the cumulative index in the year (1.81 p.p. in 5.04%) and in the cumulative rate in 12 months (2.45 p.p. in 6.50%).

The four items that mostly influenced the result accounted for -0.96 p.p. in -1.40%. “Ethyl alcohol” is among them, whose influence was positive, which was in line with the movement pointed out in the food sector of rising the price of sugar, i.e., most sugarcane was directed to the production of ethanol (with competitive prices against gasoline), which caused an increase in the price of sugar.

Other chemicals - The prices of the chemical industry fell 4.58% in October, the sixth negative change in the year and the third most intense in the entire time series of the survey. An analysis by economic group shows that the month’s result was like this: “manufacture of inorganic chemicals” recording an average change of -4.60% in the month; “manufacture of resins and elastomers”, -4.59%; and “manufacture of agricultural defensives and disinfectants”, -1.53%. All the three groups registered the fourth consecutive negative change in the year.

Therefore, the cumulative index in the year reached -5.32% and the groups of “manufacture of inorganic chemicals” and “manufacture of resins and elastomers” reached -5.62% and -26.42%, respectively. In contrast, “manufacture of agricultural defensives and disinfectants” changed 30.33% in the same indicator.

Concerning the result in the last 12 months, the groups of inorganic chemicals and agricultural defensives and disinfectants recorded 6.48% and 37.11%, respectively, whereas “manufacture of resins and elastomers” changed -23.52%. Therefore, the result in 12 months stayed at 1.84%.

This sector stood out in comparison with the 24 activities of the survey, for having the biggest price change in the month and also the biggest influence on the month’s result.

Basic metals - The prices in this activity changed –0.58, the seventh negative change in the year. This way the sector accumulated a change of -9.31% in the year and of -12.47% in 12 months. Between December 2018 (base for the current sample) and October 2022, a cumulative change of 69.86% was registered, a value very close to the overall IPP indicator for the same period (69.44%).

The four products that mostly influenced the monthly change offset their influences, remaining -0.58 p.p. for the other 20 products surveyed. The four most influential products affecting the month’s results were: “ingots, blocks, rods or plates”, “aluminum oxide”, “unwrought non-alloy aluminum” and “aluminum sheets and strips, more than 0.2 mm thick”, with the first two positively influencing the prices and the last two, negatively.

Motor vehicles - In October, the change observed in the sector was 0.38%, the 28th consecutive positive result in this indicator, accumulating an increase of 33.00%. During that interval, this sector has been impacted by increases in costs in its production chain, especially that of electronic inputs, due to the crisis in semiconductors, which helps to explain the higher prices noticed in the period. As a result, this sector accumulated a rise of 8.63% in the first ten months of 2022. The cumulative change over the last 12 months was of 10.04%, a result that has been decelerating and it is the lowest one since September 2020 (9.72%). Having registered the fourth biggest influence on the cumulative result in the year (0.58 p.p. in 5.04% of the overall industry), the activity of motor vehicles stood out among all the sectors surveyed, besides having the fourth highest weight in the calculation of the overall indicator, with a contribution of 6.97%.

The economic group surveyed in “manufacture of cars, pick ups and SUVs” changed 0.18% in October compared with September. Like the sector, this was the 28th consecutive positive figure in this indicator, with a cumulative index of 28.08% in this period. Also, the group has recorded a cumulative change of 7.50% in the first ten months of 2022, whereas it recorded 9.11% in the last 12 months. It is worth highlighting that all these figures were below the sector average.

Among the four major contributions to the monthly index, three accounted for positive impacts on the index: “diesel trucks with a capacity above 5t”, “passenger cars, gasoline, alcohol or biofuel”  and “chassis with engine for buses or trucks.” Only “gear boxes for motor vehicles” negatively impacted the result. The influence of these four products that mostly impacted the monthly change in relation to the immediately previous month was of 0.37 p.p., i.e., the other 19 products of this activity contributed with 0.01 p.p.