Industrial prices changed -1.29% in December 2022 over November, accumulating a rise of 3.13% in the year, the third lowest cumulative value in the year up to December since the beginning of the time series in 2014. The cumulative index in 2022 was nearly 25 percentage points (p.p.) lower than that of 2021.

In December, the prices of 15 out of 24 industrial activities investigated registered negative changes over the previous month.

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).

In December 2022, the prices of the mining and manufacturing industries (IPP), or, alternatively, general industry (IG), changed-1.29% when compared with those of November 2022. Between October and November, industry had dropped 0.52%.

In December 2022, 15 out of 24 industrial activities investigated retreated their prices against November. The four activities with the highest changes were: mining and quarrying industries (-7.21%); petroleum refining and biofuels (-5.46%); wood (-2.96%); and  other chemicals (-2.79%).

The sector of petroleum refining and biofuels was the biggest highlight, responsible for -0.68 percentage points (p.p.) of influence in the change of the overall industry (-1.29%). Other activities that also stood out were mining and quarrying industries (-0.33 p.p. of influence), other chemicals (-0.25 p.p.) and basic metals (-0.08 p.p.).

The cumulative index in the year hit 3.13%, against 4.48% in November. Therefore, the IPP closed 2022 with the third lowest cumulative value in the year up to December since the beginning of the time series in 2014. That value was nearly 25 percentage points (p.p.) lower than that registered by the cumulative index in 2021, a dynamics followed by seven out of 24 industrial activities investigated by the survey.

Among the activities that closed the year with the highest changes, the highlights were: pulp and paper (19.45%), printing (19.17%), toiletries, soaps and cleaning products (16.99%) and manufacture of machinery and equipment (15.71%).

On the other hand, the major influences were petroleum refining and biofuels (1.23 p.p.), other chemicals (-1.21 p.p.), food products (1.20 p.p.) and basic metals (-0.87 p.p.).

Among the major economic categories, the price changes in December against November were: 0.85% in capital goods (BK), -2.08% in intermediate goods (BI), and -0.43% in consumer goods (BC), being the change reported in durable consumer goods (BCD) of -0.16% and that in semi and non-durable consumer goods (BCND) of -0.48%.

Intermediate goods was the major influence among the major economic categories, with a weight of 57.39% in the overall index and accounting for -1.21 p.p. of the change of -1.29% in the mining and manufacturing industries.  Capital goods influenced 0.06 p.p. and consumer goods, -0.15 p.p. In the case of consumer goods, the influence reported in December was split into -0.01 p.p., due to the change in the prices of durable consumer goods, and -0.14 p.p., due to the change in semi and non-durable consumer goods.

The cumulative index in the year of the major economic categories were: capital goods (11.92%); intermediate goods (0.90%) and consumer goods (5.18%), being 6.95% for durable consumer goods and 4.84% for semi and non-durable consumer goods.

In terms of influence on the cumulative result in the year, capital goods accounted for 0.82 p.p. of the rate of 3.13% registered by the overall industry up to December this year. Intermediate goods, in turn, accounted for 0.53 p.p., whereas consumer goods exerted an influence of 1.79 p.p. on the aggregated result of industry, an influence shared by prices of durable consumer goods (0.39 p.p.) and semi-durable and non-durable consumer goods (1.40 p.p.).

The following sectors stood out:

Mining and quarrying industries: as happened since June 2022, the price change was negative (-7.21%) between November and December, being the third most intense in the year, losing only to August (-14.18%) and April (-11.54%). The cumulative index in the year was -7.92%, against 13.83% in the previous year. It was the first time that a year closed negatively since 2015, when the change had been -9.33%. The index-number of December 2022 (173.54) was 37.79% below the peak in the time series (278.96 in August 2021).

This sector stood out for registering the most intense monthly change, on the negative side like others, and the second major influence, under the same perspective (-0.33 p.p. in -1.29%).

Food products: after four consecutive months, the price change in this sector returned to the positive side, having advanced 0.29% between November and December. As a result, the annual figure stayed at 5.04%, 13.62 p.p. lower than in 2021. In terms of index-number, that of December 2022 (179.02) was 5.27% lower than that recorded in the peak of the time series (188.97 in July 2022). The sector of Food products stood out for being the third biggest influence on the cumulative index in the year (1.20 p.p. in 3.13%).

Only one product, “sterilized milk/UHT/long life milk”, whose price change was negative, stood out both in terms of change and influence, under the perspective of the comparison between December and November. The price change of “frozen poultry and giblets” was also negative, though those of the other two products (“crystallized sugar” and “residue of soybean oil extraction”), being positive, offset the downward pressure, which was reinforced by the other 39 products (with a positive influence of 0.36 p.p.).

In the comparison between December 2022 and December 2021 of the four products with the biggest influence, only “residue of soybean oil extraction” stood out in the monthly comparison and with a positive impact. Of the other three products, “fresh or cooled beef”, “semi-milled or wholly-milled rice, even polished or glazed” and “wheat flour”, only the first, the one with the highest weight in the sector, pressed the result negatively.

The group with the highest weight in this sector, “slaughtering and manufacture of meat products”, retreated both in the monthly comparison (-1.14%) and in the annual one (-3.87%), being the latter more intense than that of “sugar manufacture and refining” (-0.61%), the other group on the negative side. On the other hand, the highest negative change in the monthly comparison (-2.20%) occurred in “dairy products”, the one that registered the highest price rise in the annual comparison (20.13%).

Petroleum refining and biofuels: after a positive price change in November, this sector returned to the negative side (-5.46%). It was the third most intense drop in the year (it only loses to August, -6.99%, and September, -6.78%). Including it, the year of 2022 closed with a change of 11.06%, 58.62 p.p. lower than that of December 2021. The index-number of December 2022 (214.24) was 18.34% lower than the peak of the time series (262.34 in July 2022).

Refining stood out for being the second most intense negative change among the industrial sectors, besides being the first one in terms of influence both in M/M-1 (-0.68 p.p. in -1.29%) and in the cumulative index in 12 months (1.23 p.p. in 3.13%).

The four products that mostly influenced the monthly result accounted for -5.13 p.p. in -5.46%. All of them recorded negative changes and come from “crude petroleum oil”.

Other chemicals: the chemical industry closed 2022 with a second semester of continuous price reductions. The result of December over November (-2.79%) reinforced a trend that led the cumulative indicator in the year of this sector to -11.83%.

After a first semester with steeper pressures, the second semester of 2022 reversed the picture. The foreign market of commodities, like petroleum and basic fertilizer inputs, reversed an upward trend in the end of 2021 and first months of 2022. The scenario of uncertainties associated with the provision and demand pressure on fertilizers also cooled down as an answer to the reposition of stocks that lasted until the beginning of the first semester.

Among the products that mostly influenced the December´s figure over November, three out of four most intense highlights followed the sign of the sectoral change: “NPK-based manure or fertilizers”, “ herbicides for agricultural use” and “polypropylene (PP)”. Conversely, “fungicides for agricultural use” reported higher prices this month, following the upturn of the demand for the product in the Brazilian soybean crops.

The economic groups “manufacture of inorganic chemicals”, “manufacture of resins and elastomers” and “manufacture of agrochemical products and disinfectants” registered a negative price change between November and December. However, the last one, unlike the others, closed the year recording higher prices than those reported in December 2021.

This sector was not among the most intense changes in the cumulative index in the year, yet it accounted for the second biggest influence on the aggregate result in absolute terms: -1.21 p.p. Its weight in the calculation of the overall index (8.75%, the third highest in the survey) justified the prominence.

Basic metals: the prices of this activity changed -1.30%, the ninth negative result in the year, being the seventh consecutive one. As a result, this sector closed 2022 with a cumulative change of -12.00%, being the biggest cumulative drop in a year closure in the entire time series. This result was quite different than that reported in 2021, when this sector closed the year with a cumulative rise of 41.78%.

The four products that mostly influenced the results this month were: “gold for non-monetary use”, “carbon steel ingots, blocks, rods or plates”, “carbon steel hot-rolled coil, uncoated” and “carbon steel cold-rolled coil, uncoated”, the first one positively influencing the result of this sector and the last three ones (all of them from the steel group) negatively impacting the activity.

Concerning the major influences on the cumulative index in the year, the four products negatively influenced the result: “carbon steel ingots, blocks, rods or plates”, “stainless steel coil or sheet, including strips”, “carbon steel hot-rolled coil, uncoated” and “aluminum oxide (calcined alumina)”, the first three from the steel group and the last one from the group of non-ferrous metals, whose changes are usually related to the prices of foreign stock markets.

The basic metals sector stood out, in comparison with the 24 activities of the survey, as it accounted for the fourth biggest contribution to the monthly figure (-0.08 p.p. in -1.29%) and to the cumulative index in 2022 (-0.87 p.p. in 3.13% of the overall industry).