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Producer Price Index (IPP) grows 1.21% in July

August 26, 2022 09h00 AM | Last Updated: August 29, 2022 06h51 PM

In July 2022, industrial prices rose 1.21% compared to June. The cumulative index in the year reached 11.46% and the cumulative result in 12 months reached 18.04%. In July, of the 24 activities analyzed, 17 had price increases.

Period Rate
July 2022  1.21%
June 2022  1.01%
Cumulative in the year 11.46%
Cumulative in the last 12 months 18.04%
July 2021  1.86%

The Producer Price Index (PPI) for the Mining and Quarrying and Manufacturing Industries measures "factory-gate" prices of products, excluding taxes and freight, and covers the major economic categories: capital goods, intermediate goods and consumer goods ( durable, semi-durable and non-durable).

Producer Price Indices, by Mining and Quarrying and Manufacturing Industries (General Industry) and Sections, Brazil, last three months
General Industry and Sections Change (%)
M/M-1 Cumulative in the year M/M-12
May/2022 Jun/2022 Jul/2022 May/2022 Jun/2022 Jul/2022 May/2022 Jun/2022 Jul/2022
General Industry 1.81 1.01 1.21 9.03 10.12 11.46 19.12 18.79 18.04
B - Mining and Quarrying 12.50 -2.89 -0.22 30.71 26.93 26.65 0.61 -10.13 -13.45
C - Manufacturing 1.21 1.25 1.30 7.92 9.26 10.68 20.50 21.11 20.61
Source: IBGE, Diretoria de Pesquisas, Coord. de Estatísticas Conjunturais em Empresas

In July 2022, industrial prices rose 1.21% compared to June. The four major changes were in: manufacturing of tobacco products (7.01%); basic metals (-4.03%); petroleum refining and biofuels (3.45%); and manufacturing of other transportation equipment (3.34%). The biggest influences occurred in: food (0.69 percentage points), petroleum refining and biofuels (0.46 pp), basic metals (-0.27 pp) and paper and pulp (0.09 pp).

The cumulative index in the year reached 11.46%, compared to 10.12% in June/2022. The biggest changes were in: petroleum refining and biofuels (35.99%), mining and quarrying industries (26.65%), pulp and paper (14.46%) and printing (13.82%). The most influential sectors were: petroleum refining and biofuels: 4.01 pp, food: 2.63 pp, mining and quarrying industries: 1.30 pp and other chemicals: 0.75 pp.

The cumulative index in 12 months was 18.04%, compared to 18.79% in June/2022. The four major changes were: petroleum refining and biofuels (59.94%); other chemical products (31.88%); non-metallic minerals (21.68%); and manufacturing of machinery and equipment (20.03%). The biggest influences were in petroleum refining and biofuels (6.01 pp); food (4.61 pp); other chemicals (2.81 pp); and mining and quarrying industries (-1.02 pp).

The 1.21% change in prices in relation to June had repercussions among the major economic categories: 2.14% change in capital goods (BK); 1.08% in intermediate goods (BI); and 1.28% in consumer goods (BC), and the change observed in durable consumer goods (BCD) was -0.01%, while in semi-durable and non-durable consumer goods (BCND) it was 1.51%.

The main influence among the Major Economic Categories came from intermediate goods, whose weight in the general index was 59.10% and accounted for 0.64 pp of the 1.21% change in the IPP. Completing the list are consumer goods (0.44 pp) and capital goods (0.14 pp). In the case of consumer goods, the influence of consumer durables was zero (0.00 pp), and that of semi-durable and non-durable consumer goods was 0.44 pp.

In the cumulative index in the year (11.46%), the change was 9.04%, in the case of capital goods; 12.31% in intermediate goods; and 10.51% in consumer goods - with durable consumer goods accumulating a change of 4.95%, while semi-durable and non-durable consumer goods accrued 11.58%.

Producer Price Index, change according to 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
May/2022 Jun/2022 Jul/2022 May/2022 Jun/2022 Jul/2022 May/2022 Jun/2022 Jul/2022
General Industry 1,81 1,01 1,21 9,03 10,12 11,46 19,12 18,79 18,04
Capital Goods (BK) 2,02 1,01 2,14 5,68 6,75 9,04 17,95 18,19 18,02
Intermediate Goods (BI) 2,29 1,00 1,08 10,01 11,11 12,31 19,93 19,36 18,52
Consumer Goods (BC) 0,94 1,02 1,28 8,02 9,11 10,51 17,97 17,93 17,21
Durble Consumer Goods (BCD) 0,62 0,23 -0,01 4,72 4,97 4,95 13,62 11,75 10,21
Semi- and Non-Durable Consumer Goods (BCND) 1,00 1,16 1,51 8,65 9,92 11,58 18,81 19,14 18,57
Source: IBGE, Diretoria de Pesquisas, Coord. de Estatísticas Conjunturais em Empresas

In terms of influence on the cumulative result until July, capital goods accounted for 0.62 pp of the 11.46% of the general industry. Intermediate goods accounted for 7.22 pp, while consumer goods exerted an influence of 3.62 pp in the industry result, an influence that is divided into 0.28 pp due to changes in the prices of consumer durables and 3.35 pp caused by changes in semi-durable and non-durable consumer goods.

In the 12-month period, the change in capital goods’ prices was 18.02% in July/2022. The prices of intermediate goods, in turn, changed 18.52% in the year and the change in consumer goods was 17.21%, with consumer durables showing a price change of 10.21% and semi-durable and non-durable consumer goods, of 18.57%.

Intermediate goods accounted for 10.90 pp of the 18.04% change accumulated in 12 months in the industry, in this reference month. In June 2022 result, there was also an influence of 5.92 pp of consumer goods and 1.21 pp of capital goods.

Consumer goods had 0.57 pp in consumer durables and 5.35 pp in semi-durable and non-durable consumer goods, which has a weight of 84.64% in the major category.

Mining and quarrying industries - for the second consecutive month, the change in prices, in the month-to-month comparison, was negative, -0.22%. As a result, the cumulative index for the year dropped from 26.93% in June to 26.65% in July (in July 2021, the cumulative index for the year was 65.56%). The cumulative index in 12 months, in turn, showed a change of -13.45%, the most negative since March 2016, -20.17%.

The highlight given to the sector is because it was, in terms of change, the second among the 24 activities of the industry in the cumulative index in the year (26.65%). In turn, in the case of influence, it was the third cumulative index in the year (1.30 pp, in 11.46%) and the fourth in the cumulative index in the last 12 months (-1.02 pp, in 18.04%). The two products with the greatest weight in the sector's calculation ("crude petroleum oils" and "iron ore and its concentrates, excluding pelletized/sintered ores") showed negative changes in the month.

Food - from June to July, food prices changed, on average, 2.97%, the sixth consecutive increase. As a result, the cumulative change in the year was 11.10%, higher than that observed in the same month of 2021 (10.06%). Finally, in the comparison July 2022/July 2021, the change was 19.79%, higher than the that of the closing of 2021 (18.66%).

The highlight given to the sector is because, among all industrial sectors, it was the main influence on the monthly change, 0.69 pp, in 1.21% and the second in the other two indicators: 2.63 pp, in 11.46% (cumulative index in the year) and 4.61 pp, in 18.04% (cumulative index in the last 12 months).

As in June, the main highlight in terms of change is dairy products. On the other hand, in terms of influence, other products appear, whose weight in the calculation of the index is greater than that of milk derivatives. In any case, “sterilized / UHT / Long Life milk” is the main influence (always positive) in the three indicators: monthly, cumulative in the year and cumulative in the last 12 months. Year-to-date, another dairy product (“fresh cheeses (uncured): mozzarella except Minas cheese”) stands out, being the fourth biggest influence on the result. Among the four most influential products in the monthly perspective, along with “sterilized / UHT / Long Life milk”, “VHP (very high polarization) sugar”, “soybean extraction residues” and “frozen poultry and offal” complete the list. All with positive change, they account for 2.48 pp, in 2.97%.

Among the open food groups, in the monthly perspective, two have a higher change than the average (2.97%): “dairy products” (13.90%) and “sugar manufacturing and refining” (4.20%). The same happens for the cumulative index in the year: “dairy products” (66.51%) and “milling, manufacture of starchy products and animal feed” (14.25%) presented a higher change than the sector (11.10%). Finally, a similar situation is seen in the last 12 months, since “dairy products” (60.32%) and “coffee roasting and grinding” (53.99%) are the only ones whose price changes are higher than those of the sector average (19.79%).

Paper and pulp - the activity showed a monthly change of 3.12% in July, increasing the cumulative index in 2022 to 14.46%, the third highest in the entire general industry. In relation to the last 12 months, the activity presented a change of 19.07%.

The products that most influenced the monthly activity indicator were “chemical wood pulp, soda/sulfate, exc. dissolution paste”, “paperboard/uncoated paperboard”, "inorganic coating substances”, “uncoated kraft paper for packaging” and “uncoated writing, printing, other graphic paper”. These products, together, corresponded to 3.09 pp of the July result.

Petroleum refining and biofuels – as in every month of 2022, July had the average price change of refining products, in the month-to-month comparison, positive, this time at 3.45%. As a result, the cumulative index change until July was 35.99% (in July 2021, the change had been 44.27%) and, in 12 months, 59.94%, both were the sharpest indexes among all activities surveyed.

In terms of influence, in the case of monthly change, the sector had the second greatest influence among all industrial sectors surveyed: 0.46 pp, in 1.21% (July). In the year (4.01 pp, in 11.46%) and in 12 months (6.01 pp, in 18.04%), it was the main influence.

Other chemical products - the chemical industry, in the month of July, presented a negative change of -0.81%, the third in the year, overcoming the negative change that occurred in June (0.51%). An analysis by economic groups shows that the result for the month was distributed differently among them, with “manufacture of inorganic chemical products” presenting an average change of -1.43% in the month, “manufacture of agricultural pesticides and household disinfectants”, 0.89% and “manufacture of resins and elastomers”, -3.89%.

Thus, the cumulative index in the year reached 7.36%, with the groups “manufacture of inorganic chemical products” and “manufacture of pesticides and household disinfectants” reaching respectively 7.68% and 36.52%. Conversely, “manufacture of resins and elastomers” accumulated a fall of 9.70% in the year.

In relation to the result of the last 12 months, the highlight was the group of inorganic chemicals, influenced specifically by the increase in the cumulative prices of fertilizers. The change in prices in this group was 55.66%, followed by 47.71% in “manufacture of pesticides and household disinfectants”, both contributing significantly to the 12-month change of 31.88%. "Manufacture of resins and elastomers" accumulated fall of 2.68% in 12 months.

Regarding the four products that most influenced the monthly result (-0.66 pp, in -0.81%), there was a price reduction in “mineral or chemical fertilizers, phosphate”, “unsaturated propene (propylene)” and “polypropylene (PP)”. In the opposite situation is “fungicides for agricultural purposes”. The other 35 products surveyed in the activity had, on average, a negative result of -0.15 pp of the final change of the activity.

Among the products that most influenced the results accumulated in the year and in 12 months are “NPK-based fertilizers or manure”, “herbicides for agricultural purposes” and “mineral or chemical, phosphate fertilizers or manure”, all with positive results. Year-to-date, the highlight is “polyvinyl chloride (PVC)”, with negative change; and, in the 12-month period, “superphosphates”, with a positive result.

The sector stood out, in comparison with the 24 activities of the survey, for having the second largest change in prices in the cumulative index in 12 months, in addition to having the fourth largest influence in the cumulative index in the year and the third in the cumulative index in 12 months.

Basic metals - in the comparison between July and June, the activity price change was -4.03%, fourth negative price change in the year and the sharpest one. Thus, the sector accumulated a change of -1.32% in the year and 2.09% in 12 months. Between December 2018 (base of the current sample) and July 2022, prices in the sector had an accumulated change of 84.83%, a value higher than the general IPP indicator for the same period (79.79%).

The steel economic group, which is part of the basic metals activity, had a negative change for the fifth time in the year and the eighth time in the last 12 months (-5.26%). As a result, in July, the index reached 2.33% in the year and -1.61% in the last 12 months.

In relation to the four products that most influenced the change in the month, they accounted for -2.64 pp, in -4.03%, with -1.39 pp to the other 20 analyzed products.

The four products that most influenced the results in the month were: “stainless steel coils or sheets, including strips”, “aluminum sheets and strips, thicker than 0.2 mm”, “pig iron” and “carbon steel ingots, blocks, billets or slabs”, all with negative price changes in the month.

Regarding the year-to-date influences, the following products stand out: “aluminum oxide (calcined alumina)”, “stainless steel coils or sheets, including strips” and “copper and copper alloy bars, profiles and rods”, with negative price changes, and “galvanized or chrome-plated steel coils or sheets”, with positive change. Regarding the influences in 12 months, two products show positive results: “aluminum sheets and strips, thicker than 0.2 mm” and “aluminum oxide (calcined alumina)”. The other two products, now with a negative influence, are “carbon steel billets, blooms or slabs” and “uncoated carbon steel hot-rolled coils”.

The basic metal sector stood out, in the comparison with the 24 activities in the survey, as it had both the second biggest change in prices, in module, in the month, and the third biggest influence on prices in July.