In May 2023, industry prices changed -3.07% compared to April, the fourth consecutive negative result. In this comparison, 20 of the 24 industrial activities had a drop in prices.

The cumulative index in the year was -4.04%, the lowest for the month of May since the beginning of the time series, in 2014. The cumulative index in 12 months was -9.20%, the biggest drop of the time series for that indicator.

The Producer Price Index (PPI) of the Mining and Quarrying and Manufacturing Industries measures the “factory gate” price of products, excluding taxes and freight, and covers the major economic categories.

Among the surveyed activities, the four most intense changes were: petroleum refining and biofuels (-10.47%); mining and quarrying industries (-9.32%); other chemical products (-5.78%); and paper and pulp (-5.51%). Petroleum refining and biofuels was the most prominent industrial sector in the composition of the aggregate result, in the monthly comparison. The activity was responsible for -1.16 percentage points (pp) of influence on the -3.07% change in general industry.

Other highlights were other chemical products, with -0.47 pp of influence, mining and quarrying industries (-0.47 pp) and food (-0.42 pp).

The cumulative index in the year reached -4.04% against -0.99% in April. The 2023 result is the lowest index ever recorded for the month of May since the beginning of the time series in 2014.

The biggest changes were in petroleum refining and biofuels (-18.12%), pulp and paper (-14.93%), other chemical products (-12.65%) and beverages (7.95%). The main influences were registered in petroleum refining and biofuels: -2.17 pp, other chemical products (-1.11 pp), pulp and paper (-0.51 pp) and food (-0.50 pp).

The cumulative index in 12 months was -9.20%, the biggest drop in the time series of this indicator. The four major changes were: other chemical products (-28.49%); petroleum refining and biofuels (-28.05%); mining and quarrying industries (-26.15%); and basic metals (-16.92%). The most influential sectors were: petroleum refining and biofuels (-3.62 pp); other chemical products (-2.88 pp); mining and quarrying industries (-1.53 pp); and basic metals (-1.17 pp).

The price change of -3.07% in relation to April had the following impact on the major economic categories: -0.75% in capital goods; -4.51% in intermediate goods; and -1.32% in consumer goods, with the change observed in durable consumer goods being 0.20%, while in semi-durable and non-durable consumer goods it was -1.61%.

The main influence among the Major Economic Categories was exerted by intermediate goods, whose weight in the composition of the general index was 55.50% and accounted for -2.54 pp of the -3.07% change in mining and quarrying and manufacturing industries.

Closing the list are consumer goods, with an influence of -0.48 pp and capital goods with -0.06 pp. In the case of consumer goods, the influence observed in May is divided into 0.01 pp, which was due to the change in the prices of durable consumer goods, and -0.49 pp associated with the change of semi-durable and non-durable consumer goods.

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In the cumulative index in the year, the change was -0.32%, in the case of capital goods; -7.19% in intermediate goods; and 0.31% in consumer goods. Durable consumer goods accumulated a change of 1.07%, while semi-durable and non-durable consumer goods increased by 0.17%.

In terms of influence accumulated in the year, capital goods accounted for -0.02 pp of the -4.04% recorded in the general industry until May of this year. Intermediate goods, in turn, accounted for -4.12 pp, while consumer goods exerted an influence of 0.11 pp in the aggregate result of industry, an influence that is divided into 0.06 pp due to changes in the prices of durable consumer goods, and 0.05 pp due to changes in semi-durable and non-durable consumer goods.

In the cumulative index in 12 months, the change in capital goods prices was 5.71% in May 2023. The prices of intermediate goods, in turn, changed by -14.85% and the change in consumer goods was -2.31%, with durable consumer goods changing by 3.21%, and semi-durable and non-durable consumer goods by -3.33%.

Regarding influences, with a weight of 7.74% in the general index, capital goods accounted for 0.38 pp of the -9.20% cumulative change in 12 months in the industry. There was also an influence of -0.79 pp of consumer goods and -8.79 pp of intermediate goods.

The result for consumer goods, in particular, was influenced by 0.17 pp by durable consumer goods and by -0.96 pp by semi-durable and non-durable consumer goods, the latter with a weight of 83.44% in the calculation of the index for that major category.

Mining and quarrying industries – For the first time in the year, the sector's price change was negative (-9.32%). As a result, the cumulative index in the year, which was at 15.59% in April, reached 4.82%. The cumulative index in 12 months is -26.15%, the sharpest negative result since August 2022 (-26.60%). In terms of index number, that of May (181.91) is below the one recorded between the beginning of the pandemic, March 2020, and May 2023, whose average is 199.91.

Among industrial activities, the sector had the second sharpest negative change compared to the previous month, and the third most intense fall, in the cumulative index in 12 months, in the influence on the monthly result (-0.47 pp, in -3.07% ) and in the cumulative index in 12 months (-1.53 p.p., at -9.20%).

Food – In the monthly comparison, sector prices changed by -1.73%, the third fall in the year. As a result, the cumulative index for the year reached -2.06% (in May 2022 it was 5.72%).

In addition to having the greatest weight among the surveyed activities (24.66%), it was the fourth most influential in the monthly comparison (-0.42 pp, in -3.07%) and in the cumulative result for the year (-0.50 pp, at -4.04%).

The four products with the highest influence in the comparison between May and April 2023 accounted for -0.79 pp, of the -1.73% change. So -0.94 pp is the share of the remaining 39 products in the sample. The products highlighted in terms of change and influence, even in the monthly comparison, have only one intersection, “raw soybean oil, even degummed”.

However, other soybean-derived products and different beef presentations stand out in terms of change or influence. The negative change in the price of soybean derivatives is in line with the its harvest. A greater availability of animals ready for slaughter is at the base of the negative change in beef  (fresh, chilled or frozen).

Paper and pulp – The activity, whose prices changed -5.51% in comparison with the previous month, had the fourth highest change among all others in general industry. With this result, the cumulative in the year was -14.93%, the second highest change. This result also corresponds to the third largest influence in the cumulative result for the year, of -0.51 pp, at -4.04%. In the cumulative index in 12 months, the change of the sector was -7.27%.

Petroleum refining and biofuels – In the comparison between May and April 2023, sector prices varied, on average, -10.47%. It is the sixth consecutive negative result and the highest since April 2020 (-20.61%). So, the cumulative index in the year was -18.12% (in the same month of the previous year, it had been 26.37%). The cumulative result in 12 months was -28.05%, the most intense negative change since May 2020 (-36.01%). It is worth noting that the recent movement took the index to 175.38, standing on a level between September (170.18) and October 2021 (182.34). To better illustrate, the average index number between the beginning of the pandemic, March 2020, and May 2023 is 171.46.

The sector stood out in all comparisons made, both in terms of change and in terms of influence, in addition to being the second sector with the highest current weight in the survey (10.22%). In all comparisons, the sector's result was the first, with the only exception in the case of the change of the cumulative index in 12 months, which was the second (negative change). Its influence was -1.16 pp, in -3.07% in the monthly comparison; -2.17 pp, in -4.04% in the year; and -3.62 pp, in -9.20% in the cumulativ index over 12 months.

Other chemical products – Prices continued on a downward trend in May, -5.78% compared to those practiced in April. With this result, the sector, which has been on a deflationary path since July 2022, stood out due to its influence on the general index, in addition to the magnitude of the rates registered in all the indicators investigated by the survey.

The change of -5.78% compared to April, which was the biggest decrease in this series started in the last half of 2022, was also among the sharpest in general industry in this reference month, the third largest absolute change among the investigated activities. In terms of influence, chemical products contributed with -0.47 pp for the -3.07% change in the IPP.

In longer-term indicators, the sector registered -12.65% in the cumultive rate of 2023 and a change of -28.49% in relation to the prices observed in May of last year, with influences of -1.11 pp and -2.88 pp, respectively, in the calculation of these indicators at the industry aggregate level. In all these four perspectives, the activity was among the sharpest sectoral results observed in the month.

Basic metals – Compared to April, the activity's price change was -2.38%, once again presenting a drop after the positive results observed in March and April. In addition, the May result is the biggest monthly drop since September last year (-3.77%). Thus, in the year, the activity presents a negative result for the first time in 2023, with a cumulative decrease of 1.64%. In the last 12 months, the sector also remains in the negative field, accumulating a reduction of 16.92%, the most intense drop in this indicator since the beginning of the series in 2010. And it is again in the cumulative index in 12 months that the sector stood out this month, with the fourth highest change among the 24 activities surveyed in the IPP, as well as the fourth highest influence, with -1.17 pp in -9.20% of the change in general industry.