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Producer Price Index rises 2.28% in June

August 01, 2018 09h00 AM | Last Updated: August 07, 2018 03h16 PM

The prices of the mining and manufacturing industries changed 2.28% in June 2018, a figure below that of May against April (2.55%). The cumulative index in the year stayed at 8.62% and, in 12 months, at 13.45%. The IPP had changed -0.20% in June 2017. Of the 24 activities, 19 increased their prices against 23 in the previous month. The support material of the IPP is on the right side of this page.

Period

Rate

June 2018

2.28%

May 2018

2.55%

June 2017

-0.20%

Cumulative in the year

8.62%

Cumulative in 12 months

13.45%

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 Indexes, according to Mining and Manufacturing Industries (Overall Industry) and Sections - Last three months
Overall Industry and Sections Changes (%)
M/M-1 Cumulative in the Year M/M-12
APR/18 MAY/18 JUN/18 APR/18 MAY/18 JUN/18 APR/18 MAY/18 JUN/18
Overall Industry 1.58 2.55 2.28 3.55 6.20 8.62 8.05 10.70 13.45
B - Mining Industries 4.83 0.81 5.72 13.25 14.17 20.69 23.91 40.39 59.02
C - Manufacturing Industries 1.44 2.63 2.13 3.16 5.87 8.13 7.44 9.68 11.99
Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria        

The four biggest changes over May 2018 were in mining and quarrying industries (5.72%), other chemicals (4.47%), food products (3.39%) and oil refining and ethanol products (2.85%).

In terms of influence, the highlights in June compared with May were: food products (0.64 p.p.), other chemicals (0.45 p.p.), oil refining and ethanol products (0.35 p.p.) and mining and quarrying industries (0.24 p.p.).

In June 2018, the cumulative index in the year (June 2018 against December 2017) hit 8.62%, against 6.20% in May 2018. Among the activities that registered the highest percentage changes in this indicator, the highlights were: mining and quarrying industries (20.69%), oil refining and ethanol products (15.91%), other chemicals (14.83%) and basic metals (11.52%). The sectors that exerted the biggest influence were: oil refining and ethanol products (1.82 p.p.), food products (1.71 p.p.), other chemicals (1.43 p.p.) and basic metals (0.92 p.p.).

Compared with June 2017, the price change in June 2018 was of 13.45%, against 10.70% in May 2018. The four biggest price changes were recorded in mining and quarrying industries (59.02%), oil refining and ethanol products (40.13%), other chemicals (21.24%) and basic metals (17.93%). The sectors that exerted the biggest influence in this comparison were: oil refining and ethanol products (3.97 p.p.), other chemicals (2.02 p.p.), mining and quarrying industries (1.83 p.p.) and basic metals (1.42 p.p.).

In June 2018, the price change of 2.28% against May reflected in the major economic categories like this: 0.96% in capital goods; 2.88% in intermediate goods; and 1.56% in consumer goods, of which 0.36% in durable consumer goods and 1.93% in semi and non-durable consumer goods.

Producer Price Indexes, according to Mining and Manufacturing Industries (Overall Industry) and Major Economic Categories  - Last three months
Overall Industry and Sections Changes (%)
M/M-1 Cumulative in the Year M/M-12
APR/18 MAY/18 JUN/18 APR/18 MAY/18 JUN/18 APR/18 MAY/18 JUN/18
Overall Industry 1.58 2.55 2.28 3.55 6.20 8.62 8.05 10.70 13.45
Capital goods (BK) 1.88 1.48 0.96 3.25 4.78 5.79 7.15 7.99 8.00
Intermediate goods (BI) 2.30 3.41 2.88 5.61 9.21 12.35 11.79 15.92 19.72
Consumer goods (BC) 0.28 1.33 1.56 0.25 1.58 3.16 2.33 3.11 4.92
Durable consumer goods (BCD) 0.13 0.46 0.36 1.60 2.06 2.44 4.48 3.35 3.75
Semi-durable and non-durable consumer goods (BCND) 0.33 1.61 1.93 -0.18 1.43 3.39 1.66 3.04 5.29
Source: IBGE, Diretoria de Pesquisas, Coordenação de Indústria        

The influence of the major economic categories on the overall result (2.28%) was as follows: 0.08 p.p. of capital goods, 1.68 p.p. of intermediate goods and 0.51 p.p. of consumer goods.  In the case of consumer goods, 0.49 p.p. was due to price changes observed in semi and non-durable consumer goods and 0.03 p.p., in durable consumer goods.

In June, the cumulative rate in the year was of 8.62%, being 5.79% from capital goods (influence of 0.49 p.p.), 12.35% from intermediate goods (7.03 p.p.) and 3.16% of consumer goods (1.09 p.p.). In this last case, the result was influenced by durable consumer goods (0.20 p.p.) and by semi and non-durable consumer goods (0.89 p.p.).

The cumulative index in the last 12 months in industry reached 13.45%, with the following changes: capital goods, 8.00% (0.70 p.p.); intermediate goods, 19.72% (11.01 p.p.); and consumer goods, 4.92% (1.74 p.p.), with the influence of durable consumer goods at 0.32 p.p. and of semi and non-durable consumer goods,1.43 p.p.

Six sectors stand out in June

Mining and quarrying industries: the prices of the mining and quarrying industries changed 5.72% in June in relation to the previous month. As a result, it rose for seven consecutive months, since December 2017.

The cumulative index in the year rose 20.69%. The prices of the mining and quarrying activities increased 59.02% over June 2017. Both indicators posted their highest changes. The influence of the prices of that sector over the monthly indicator (0.24 p.p. in 2.28%) and over the change in relation to June 2017 of the overall industry (1.83 p.p. in 13.45%) stood out.

Food products: the prices of this sector changed, on average, 3.39% in June, registering the fifth positive change in a row. The May (3.22%) and June figures were the highest ones since June 2016 (2.73%). Of the 25 rates followed up between June 2016 and June 2018, 14 were positive and 11, negative. The cumulative change up to June was of 8.97%, surpassing that in the end of 2016 (8.79%). Lastly, the change was of 5.87% in the June 2018/June 2017 comparison, recording the second consecutive positive result after 11 negative figures.

The highlights were concentrated, both in terms of change and influence, on products from "Slaughter and manufacture of meat products" and "Dairy products", in which the four products that influenced the most ("sterilized milk/UHT/long-life milk", "wheat flour", "frozen poultry and giblets" and "fresh or cooled poultry and giblets") accounted for 1.97 p.p. of the rate of 3.39%.

Oil refining and ethanol products: the prices of this sector changed, on average, 2.85% in June, the fourth consecutive rise, though smaller than the two previous ones: 4.31% in April and 7.36% in May. Considering the June figure, this sector accrued a change of 15.91%, the highest change for June in the time series started in January 2010. Compared with the same month a year ago, the change was the highest one in the time series: 40.13%.

The four major influences in the result accounted for 2.45 p.p. in 2.85%, led by the rise in "naphtha", followed by "aviation kerosene", "ethyl alcohol (anhydrous or hydrated)" and "motor gasoline", all of them positive.

Other chemicals: the chemical industry changed 4.47% in June, the highest rate since March 2015, completing 10 consecutive months of price rises (25.66% in this period). As a result, the cumulative index in the year positively changed 14.83%, the highest change in the time series started in June 2010, and the cumulative rate over the last 12 months changed 21.24%, the highest change ever reached by this activity in the time series, a rather different situation than that happened in June 2017, when the cumulative index in 12 months hit -1.89%.

The figures reported this month were linked to the costs of the imported raw material, to the prices of petroleum derivatives – especially naphtha, the biggest highlight in terms of influence on the results of the activity of oil refining – and to the valuation of the US dollar in relation to the Real, which hit 3.8% this month and 14.6% in the cumulative rate in the year.

Basic metals: it changed 2.85% in relation to the previous month, the ninth positive rate over the last 10 months. The index was -0.06% in January 2018. This activity accrued 11.52% in the year and 17.93% over the last 12 months, registering the highest figures in the time series. The prices of this sector recorded a cumulative change of 45.49% between December 2013 (base of the time series) and June 2018.

Among the four products that posted the biggest price changes, considering month over month, cumulative in the year and cumulative over the last 12 months, all of the results were positive. It is interesting to notice that the three out of the four products that mostly influenced the result this month (change x contribution) also appeared as the biggest changes. They were: "stainless steel coil or sheet, including stripes", "aluminum square and round plates and stripes" and "carbon steel ingots, blocks, rods or plates". The fourth product that mostly influenced the results was "copper and copper alloy bars, profiles and rebars". These four products accounted for 2.30 p.p. of the change this month, i.e., the influence of the other 18 products was only 0.55 p.p.

Motor vehicles: this sector changed 0.27% in June when compared with the immediately previous month. As a result, the cumulative change in the year reached 3.15%. Just for the sake of comparison, the cumulative index was 2.90% in June 2017. In the last 12 months, this sector accrued a change of 4.81%.

It is worth highlighting that the monthly change represented the tenth consecutive positive result and the 22nd over the last 23 months, as the only negative change was recorded in August 2017 (-0.08%). The period between August 2016 and June 2018 posted a cumulative change of 10.87%.

The activity of motor vehicles stood out as it represented the third highest weight in the computation of the overall indicator, with a contribution of 10.72%, only after the sectors of food products (19.98%) and oil refining and ethanol products (12.76%).