Producer Price Index (IPP) changes by -0.30% in February
March 29, 2023 09h00 AM | Last Updated: April 04, 2023 06h30 PM
In February 2023, industry prices changed -0.30% from January. The cumulative index in the year reached -0.01%, lowest figure in a month a February since the start of the time series, in 2014. The cumulative index in 12 months was 1.38%. Eleven of the 24 activities of industry surveyed recorded negative changes in price against the immediately previous month.
|Cumulative in the year||-0.01|
|Cumulative in 12 months||1.38|
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, by Mining and Quarrying Industries and Manufacturing Industry (General Industry) e and Sections, Brazil, last three months|
|General Industry and Sections||Change (%)|
|M/M₋₁||Cumulative in the Year||M/M₋₁₂|
|B - Mining and Quaryying Industries||-7.21||9.62||3.00||-7.92||9.62||12.90||-7.92||-7.85||-12.40|
|C - Manufacturing Industry||-0.98||-0.13||-0.47||3.73||-0.13||-0.60||3.73||2.80||2.21|
|Source: IBGE, Diretoria de Pesquisas, Coord. de Estatísticas Conjunturais em Empresas|
In February 2023, industry prices changed by -0.30% from January. Eleven of the 24 activities of indudstry investigated recorded negative changes against the previous month, following the result of general industry.
The four biggest changes were: wearing apparel (4.91%); mining and quarrying industry (3.00%); other chemicals (-2.43%); and beverages (1.79%). The main contribution came from other chemicals, the main highlight in the composition of the aggregate result. The activity was responsible for -0.21 percentage points (p.p) of influence on the change in general industry (-0.30%). Also in this respect, other activities that also stood out were petroleum refining and biofuels (with -0.20 p.p. of influence, food products (0.18 p.p) and mining and quarrying industries (0.14 p.p).
The cumulative index in the year reached -0.01% against 0.29% in January. That is the third lowest result in a month of February since the beginning of the time series, in 2014. In 2022, the cumulative rate up to February had been 1.74%.
The highest changes were those of mining and quarrying industries (12.90%), beverages (7.26%), wearing apparel (5.82%) and pulp and paper (-3.93%). The main contributions were those from mining and quarrying industries (0.56 p.p.), petroleum refining and biofuels (-0.37 p.p.), other chemicals (-0.30 p.p.) and beverages (0.16 p.p.).
The cumulative index in 12 months reached 1.38% against 2.24% in January. The four biggest changes came from: beverages (18.13%), wearing apparel (17.61%); printing (16.03%) and tobacco (15.36%). The sectors representing the greatest influence were: other chemicals (-1.39 pp), food products (1.00 pp), mining and quarrying industries (-0.70 p.p.) and basic metals (-0.54 p.p.).
The change of prices by -0.30% from January had the following results among the major economic categories: -0.22% of change in capital goods (BK); -0.69% in intermediate goods (BI); and 0.32% in consumer goods (BC), with a change of 0.13% recorded by durable consumer goods (BCD) and of 0.36% for semi and non-durable consumer goods (BCND).
The main influence among the major economic categories was exerted by intermediate goods, whose weight in the overall index was 57.18%, and it accounted for -0.40 p.p. of the –0.30% change in the mining and manufacturing industries.
Consumer goods (influence of 0.11 p.p.) and capital goods (-0.02 p.p.) complete the list. In the case of consumer goods, the influence was split into 0.01 p.p., due the rise in prices of durable consumer goods and 0.10 p.p., due to the change in prices of semi and non-durable consumer goods.
As for the cumulative index in the year, changes were -0.47%, for capital goods; -0.37%, for intermediate goods; and 0.67%, for consumer goods - with durable consumer goods having a cumulative change of 0.91% and semi-and non-durable consumer goods, of 0.62%.
In terms of influence on the cumulative result in the year up to February, capital goods accounted for -0.03 p.p. of the -0.01% registered by the overall industry. Intermediate goods, in turn, accounted for -0.21 p.p., whereas consumer goods exerted an influence of 0.24 p.p. on the aggregated result of industry, an influence shared by prices of durable consumer goods (0.05p.p.) and semi-durable and non-durable consumer goods (0.18 p.p.).
In the cumulative index in 12 months, the change in prices of capital goods was 8.14% in February 2023. The prices of intermediate goods changed -1.62% in the period of one year and the change in consumer goods was 5.18%, with durable consumer goods having changed by 6.33% and semi and non-durable consumer goods, 4.96%.
Considering the influences on the aggregate result, consumer goods, responsible for 35.40% in the general index, accounted for 1.77 p.p. of the 1.38% of cumulative change in 12 months in industry, in the reference month. The result of February 2023 was also influenced by the rate of 0.57 p.p. in capital goods and of -0.95 p.p. in intermediate goods.
The result of consumer goods was influenced in by durable consumer goods (0.35 p. p) and semi and non-durable consumer goods (1.42 p.p), the latter with a weight of 83.52% in the index of this major category.
|Producer Price Index, change by Mining and Quarrying and Manufacturing Industries (General 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|
|Capital Goods (BK)||0.99||-0.25||-0.22||12.07||-0.25||-0.47||12.07||9.02||8.14|
|Intermediate Goods (BI)||-2.06||0.33||-0.69||0.93||0.33||-0.37||0.93||-0.49||-1.62|
|Consumer Goods (BC)||-0.41||0.35||0.32||5.19||0.35||0.67||5.19||5.58||5.18|
|Durable Consumer Goods (BCD)||-0.17||0.78||0.13||6.94||0.78||0.91||6.94||6.54||6.33|
|Semi-durable and Non-durable Consumer Goods (BCND)||-0.46||0.27||0.36||4.85||0.27||0.62||4.85||5.39||4.96|
|Source: IBGE, Diretoria de Pesquisas, Coord. de Estatísticas Conjunturais em Empresas|
Mining and quarrying industries – after negative changes in prices throughout the last seven momths in 2022, there was a positive change of 3.00%. As a result, the cumulative index in in the year reached 12.90%. In comparison between February 2023 and February 2022, current prices are 12.40% below those.
The highlight of the sector resulted from the fact that the change of prices, in the three comparison of the analysis was positive, and the second highest in the monthly indicator, and the highest regarding the cumulative index in the year. In terms of influence, it was the fourth on the monthly indicator (0.14 p.p. out of -0.30%) and the first in the cumulative index in the year (0.56 p.p. out of -0.01%) and in the cumulative index in 12 months (-0.70 p.p. out of 1.38%).
The positive result observed between January and February was in line with the rise of prices of iron ore, considering the the other products, mainly, crude oil, recorded negative changes in prices.
Food products – from January to February, the prices in the sector changed, on the average, -0.73%, and got negative prices again after two consecutive months with positive changes. The negative rate in February is the lowest since September 2022, -1.10%. With the current result, the cumulative inde in the year reched -0.25%. The cumulative index in 12 months stood at 4.28%, 1.47 p.p. below in January 2023.
The change in food prices among all changes in sectors of mining and quarrying and manufacturing industries accounted for the third most significant contribution to the monthly indicator (-0.18 p.p out of -0.30%) and the second most relevant cumulative in 12 months (1.00 p. p, out of 1.38%).
Two groups among those groups in the survey recorded changes opposite to those in the sector: “dairy products” (1.00%) and “manufacture and refining of sugar” (0.66%). The harsh climate accounts for the performance of dairy products, whereas in the case of sugarcane, a lower supply lies at the basis of the change observed. As the change of prices was negative, it is worthy of mention that, among the groups, “manufacture of oild and animal fats” stood out (-3.95%).
Beverages - in February, there was a rise of 1.79% of prices of the sector in relation to the previous month. A less significant change than in January (5.38%), but even so among the main ones, being the fourth one, in absolute terms, was among the other activities.
Except for December 2022, the sector has remained with a positive change of prices since April 2021. Prices of this activity recorded an increase of 7.26% in the year, second biggest change and fourth biggest influence on the cumulative indicator in the year (0.16 p.p. out of -0.01%) and, regarding other activities, besides being the biggest change in February for the sector since the start of the series in 2010.
In comparison with the same month a year ago, there was an increase of 18.13% in prices, with the biggest change among the activities surveyed.
Petroleum refining – from January to February, prices of the sector changed by -1.66%, third negative rate in a row. As a result, the cumulative index in the year stood at -3.12%. The cumlative index in 12 months remains in the positive field and indicates that prices in February 23 were 3.49% above those in February 2022. In this comparison, it is the lowest result since January 2021 (-1.22%).
The change observed in the sector was the second biggest influence among all the sectors if industry, both in terms of the monthly indicator (-0.20 p.p., out of -0.30%), and of the cumulative indicator in the year (-0.37 p.p., out of -0.01%).
Other chemicals – in February, chemical industry recorded another fall of average prices against the immediately previous month, -2.43%. The result of the sector was negative for the eighth consecutive month, considering the monthly indicator. The moment of deflation in chemical activity has been, over the months, a key element to determine the result of overall industry. That was not different in February, and the decrease of -2.43% was the third most significant change observed among all the sectors surveyed by the IPP, and, given its contribution to the overall index, the sector accounted for the main influence on the aggregate result, -0.21 p.p. out of the overall rate of -0.30% of mining and quarrying and manufacturing industry.
The intensity of decrease of prices in the month was also responsible for placing chemical industry among the main influences on the cumulative result of IPP in the year (third main contribution). General inflation at factory gate reversed the performance from January to February, resulting in a cumulative change of -0.01% in the year - chemicals accounted for -0.30 p.p of this result, with a change of -3.44%.
Against February 2022, the secor had a deflation of -13.98%, a result that consolidades the impact of this path of fall of prices on the dynamics of industry as for the cumulative index in 12 months. The IPP has decelerated since the second semester of 2022 and, in February, it reached 1.38%, with the main contribution from chemical activity, responsible for -1.39 p.p in the composition of that rate.
Basic metals - in the comparison between February 2023 and January 2022, the change of prices of this activity was 0.33%, second positive result after a series of seven months of decrease, between June and December 2022. That way, in the first two months of 2023, the activity had a cumulative increase of 0.40%. In the last 12 months, the sector has a cumulative decrease of 7.98%, a less significant decrease than that observed in the previous month for the same indicator (-10.62%), but still far from the result observed in February 2022, when the sector had recorded a cumulative increase of 1.,71% in the last 12 months. And it was in terms of the cumulative indicator that the sector stood out this month, having accounted for the fourth main influenfe among the 24 activities surveyed within the IPP, with -0.54 percentage points out of 1.38% of change in General industry.
Steel activity also recorded an increase in the month, with a result of 0.32% in February, and a change of 0.22% in the first two months of the year. However, in the last 12 months, the result of the group remains negative, with a change of -6.10%. It is worth mentioning that the steel group is mainly affected by the recomposition of stocks in the consuer chain and by prices of iron roe which, despite the rise in January, it still has lower prices in the 12-month comparison. Besides, we should consider the appreciation of real versus the dollar, of 0.5% in the last 12 months.