Industry prices changed -1.05% in January 2019, a result higher than that of December 2018 (-1.56%). Of the 24 activities surveyed, 11 presented positive price changes, the same amount as in the previous month. The support material for the Producer Price Index release is available on this page.

From December 2018 to January 2019, prices of the mining and quarrying and manufacturing industries (general industry) changed -1.05%, higher than the one observed in the comparison between December and November of 2018 (-1.56%). The four largest changes occurred among the products of the following industrial activities: mining and quarrying industries (-8.98%), other chemicals (-3.43%), tobacco (-2.77%) and wood
(-2.52%). The main influences were mining and quarrying industries (-0.40 p.p.), other chemicals (-0.36 p.p.), food (-0.24 p.p.) and basic metals (-0.17 p.p.).

In the cumulative index of the last 12 months (January 2019 versus January 2018) the result was 7.99%, against 9.64% in December 2018. The four largest price changes occurred in other transportation equipment (14.73% ), mining and quarrying industries (13.82%), other chemicals (13.01%) and tobacco (11.78%). In this indicator, the most influential sectors were: food (1.50 pp), other chemicals (1.27 pp), basic metals (0.90 pp) and motor vehicles (0.62 pp).

Among the Major Economic Categories, the price change of -1.05% in January was as follows: capital goods (-0.23%), intermediate goods (-1.62%) and consumer goods (- 0.22%), of which 0.88% relative to durable consumer goods and -0.58% to semi-durable and non-durable consumer goods.
And the influence of the Major Economic Categories was as follows: capital goods (-0.02 pp), intermediate goods (-0.95 pp) and consumer goods (-0.07 pp), with semi-durable consumer goods and non-durable goods accounting for -0.14 pp and durable consumer goods, for 0.07 pp.

The change of 7.99% in the cumulative index in the last 12 months had the following distribution among the Major Economic Categories: capital goods, 10.43% (0.89 p.p.); intermediate goods, 10.30% (5.89 p.p.); and consumer goods, 3.53% (1.21 p.p.): 0.47 pp of durable consumer goods and 0.74 pp of semi-durable and non-durable consumer goods.

The highlights are the following sectors:

Mining and quarrying: in January, the sector changed -8.98%, the fourth drop in a row after a series of increases since December 2017. Compared with January 2018, there was a positive change of 13.82%, the second largest one for the general industry. In terms of influence, the results were -0.40 pp in the comparison month versus previous month (-1.05%) and 0.54 p.p. in the cumulative index in the last 12 months (7.99%).

Food Products: in January 2019, the prices of the sector changed by -1.29%. Compared with January 2018, the most recent prices are 8.01% higher. In terms of the index number, the peak of the series was in September 2018 (126.90), that is, in January the observed index number (124.31) is lower by 2.00%. Beside the sector having the highest participation in the calculation (19.58%), it was the third largest influence in the month-on-month result (-0.24 pp, -1.05%) and the first in the comparison between the months of January 2019 and 2018 (1.50 pp, 7.99%).

In the case of highlighted products, they are the same four that appear both from the perspective of change and from the perspective of influence. The influence of the four products was -0.96 pp (-1.29%), and one single product had a positive price change, "sterilized milk/UHT/Long Life", which is due, to a large extent, to the increase in the price of raw milk, driven by the higher industry demand. The other three products are: "soybean residue", "crude soybean oil, whether or not degummed", and  "fresh or coolled beef". The reduction in these prices is linked to the usual seasonality in the meat market and to the American soybean offer, which still puts pressure on the market.

Other Chemicals: the chemical industry, in January, presented a negative change (-3.43%) for the third consecutive month, but nevertheless resulted in a cumulative index of 13.01% in the last 12 months.
The price reduction is closely linked to the international results, the costs of the imported raw material, the oil products prices accumulated in the last quarter and especially the naphtha (significant fall
in the month).

The four major price changes of the activity in the month were negative, and three of the products that were highlighted in this type of analysis were also in terms of influence: "HDPE", "propene (propylene), unsaturated", all three using petroleum derivatives in their composition. The fourth product was "manure and NPK fertilizers", also with falling prices.

In relation to the cumulative results in the last 12 months, the situation is the opposite of the MoM comparison. The four most influential products had positive results: "manure and NPK fertilizers", "herbicides for agricultural use", "propene (propylene), unsaturated", "aqueous paints and varnishes for construction". The four products with the greatest influence in the month against previous month had a -2.73pp influence in the -3.43% change in the month, that is, the other 28 products contributed positively with -0.70pp.

Basic Metals: when comparing the prices of January 2019 with those of December 2018, there was a change of -2.05%, the fourth negative figure in a row. However, even with this result, the activity accumulated in the last 12 months a change of 11.26%, very close to the one accumulated in January 12, 2018 (10.47%). An analysis of the series' index numbers indicates that between December 2013 (base series) and January 2019, industry prices had a cumulative change of 45.06%.

The four products with the biggest price changes belong to the "non-ferrous metals" group, namely: "unwrought non-alloy aluminum", "unwrought aluminum alloys", "copper alloy bars, rods and profiles" and "aluminum bars, profiles or rebars". These four products in relation to the total change of the month represented -1.54 p.p., out of the total of -2.05% of the activity.

The sector is influenced by the combination of the results of the steel groups and the group of non-ferrous materials (copper and aluminum), which have different behavior. The first group in the steel sector is affected by surplus steel capacity in the world (despite production cuts in China, coupled with price increases), dollar variations, fluctuations in iron ore, which has recovered its price level from the second half of 2017 due to the heat of the motor sector and the protectionist measures adopted by the European Union and the United States. Regarding non-ferrous materials, prices are linked to international prices, which fell in the first half of January.

Motor Vehicles: in January, the change observed in the sector was 0.57%, when compared to the previous month, the same figure observed from November to December. With this result, the cumulative index in the last 12 months reached 5.66%. In January 2018, the cumulative result got very close to it (5.11%).

January result was the 28th positive change in the last 30 months. From August 2016 to December 2018, there was negative change only in August 2017 (-0.08%) and in November 2018 (-0.05%), accumulating a rise of 15.01% in the period.

In addition to being one of the most important sectors in the PPI, with a contribution of 11.11% – just behind the food sectors (19.58%) and petroleum refining and ethanol products (11.91%) – the activity of motor vehicles also stood out for having the fourth largest influence on the cumulative change in the last 12 months (0.62 pp in 7.99%).

Among the four most influential products, only one had a positive impact on the month-over-month index: "flex-fuel, gasoline or ethanol passenger car with any engine power output", which is, by the way, the most important product in the industry. The other three had a negative impact on the indicator: "gearboxes for motor vehicles", "bus bodies" and "tractor-truck for trailers and semi-trailers" – only the latter product is among those with the highest weights in the sector. The influence of the four products that most influenced the monthly change was 0.49 p.p., that is, the other 21 products of the activity contributed with 0.09 p.p.

Regarding the cumulative index in the last 12 months, all four products with the highest influence on the index had a positive impact: "flex-fuel, gasoline or ethanol passenger car with any engine power output", "diesel truck with load capacity above 5t" , "engine parts for motor vehicles" and "tractor-trucks for trailers and semi-trailers" – these four products are also those with the highest weights in the activity.