In March 2023, the industrial prices changed -0.66% over February. In this same comparison, 12 out of 24 industrial activities dropped.

The cumulative index in the year stayed at -0.66%, the second lowest for March in the time series started in 2014. The cumulative index in 12 months stayed at -2.32%. The IPP had been 3.12% in March 2022.

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 the major economic categories.

Among the activities under analysis, the four most intense changes were: petroleum refining and biofuels (-4.10%), pulp and paper (-2.42%), other chemicals (-1.41%) and leather products and footwear (1.28%). As the major highlight in the composition of the monthly result, petroleum refining and biofuels was responsible for -0.48 percentage points (p.p.) of influence on the change of -0.66% of the overall industry. Other activities that also highlighted were other chemicals, with -0.12 p.p. of influence, food (-0.11 p.p.) and pulp and paper (-0.08 p.p.).

The cumulative index in the year hit -0.66% against 0.00% in February. That is the second lowest result ever registered for March since the beginning of the time series, in 2014. In 2022, the cumulative rate up to March had been 4.91%.

The highest changes were in mining and quarrying industries (13.67%), beverages (7.67%), petroleum refining and biofuels (-7.08%) and wearing apparel (7.06%). The major influences were recorded in petroleum refining and biofuels (-0.85 p.p.), mining and quarrying industries (0.59 p.p.),  other chemicals (-0.42 p.p.) and pulp and paper (-0.21 p.p.).

The cumulative index in 12 months reached -2.32% against 1.39% in February. The four biggest changes were: mining and quarrying industries (-20.31%), other chemicals (-19.85%), tobacco (17.23%) and wearing apparel (16.18%). On the other hand, the most influential sectors were: other chemicals (-2.03 p.p.), petroleum refining and biofuels (-1.28 p.p.), mining and quarrying industries (-1.24 p.p.) and motor vehicles (0.52 p.p.).

The change of -0.66% in relation to February had an impact on the major economic categories: capital goods, 0.74%; intermediate goods, -1.21%; and consumer goods, -0.07%, with -0.11% observed in durable consumer goods and -0.06% in semi and non-durable consumer goods.

The major influence among the major economic categories was exerted by intermediate goods, with a weight of 56.83% in the overall index and accounting for -0.69 p.p. of the change of -0.66% in mining and quarrying and manufacturing industries.

Capital goods (influence of 0.06 p.p.) and consumer goods (-0.02 p.p.) complete the list. In the case of consumer goods, the influence observed in March was split into -0.01 p.p., due the change in prices of durable consumer goods and -0.02 p.p., due to the change in prices of semi and non-durable consumer goods.

As for the cumulative index in the year, changes were 0.30%, for capital goods; -’1.61%, for intermediate goods; and 0.70%, for consumer goods - with durable consumer goods having a cumulative change of 0.78% and semi-and non-durable consumer goods, of 0.68%.

In terms of influence on the cumulative index in the year, capital goods accounted for 0.02 p.p. of the rate of -0.66% registered in the overall industry. Intermediate goods accounted for -0.92 p.p., and consumer goods contributed with 0.24 p.p. to the aggregated result of industry, an influence shared by durable consumer goods (0.04 p.p.) and semi-durable and non-durable consumer goods (0.20 p.p.).

Considering the cumulative index in 12 months, the change of prices of capital goods was 8.66%.   The prices of intermediate goods, in turn, changed -6.31% in the period of one year and the change in consumer goods was 2.46%, with durable consumer goods having changed by 5.77% and semi and non-durable consumer goods, 1.83%.

Considering the influences on the aggregate result, consumer goods, responsible for 35.64% in the general index, accounted for 0.84  p.p. of the -2.32% of cumulative change in 12 months in industry, in the reference month. The result of March 2023 was also influenced by the rate of 0.59 p.p. in capital goods and of -3.74 p.p. in intermediate goods.

The result of consumer goods was influenced in by durable consumer goods (0.31 p. p) and semi and non-durable consumer goods (0.52 p.p), the latter with a weight of 83.55% in the index of this major category.

Mining and quarrying industries - the prices rose 0.68% in this sector, the third consecutive positive figure and the lowest one in the quarter (9.62% in January and 3.00% in February). As a result, the cumulative index in the year hit 13.67%, lower than that of March 2022 (31.35%). Compared with March 2022, the prices retreated 20.31%, the tenth consecutive negative figure in this comparison.

In addition, it was the second major influence on the cumulative index in the year (0.59 p.p. in -0.66%) and the third one on the cumulative index in 12 months (-1.24 p.p. in -2.32%). The prices of the two products with the highest weight registered opposite changes: that of “iron ore and its concentrates” was positive and that of “crude petroleum oil”, negative. The foreign market influenced the domestic result.

Food - for the second month in a row, the prices in this sector changed negatively when compared with the previous month: -0.61% in February and -0.46% in March. As a result, the cumulative rate in the year hit -0.59%, the lowest figure registered in March since 2019 (-0.96%). In the comparison between March 2023 and March 2022, the current change of 1.14% was the lowest one since August 2019 (0.73%).

The highlight given to this sector was due to the fact that its results are the third biggest (in module) influence on the monthly indicator (-0.11 p.p. in -0.66%), besides the sector remaining with the highest weight in industry (24.18%).

Among the products that mostly influenced the monthly figure (accounting for -0.31 p.p. in -0.46%) are two soybean derivatives, both of them with a negative influence, and “margarine” and “VHP sugar”, with a positive influence. In the case of the soybean derivatives, the harvest season explains the downward pressure in the prices, the opposite of sugarcane derivatives, in the off-season period.

Pulp and paper - this activity changed -2.42% in the monthly indicator, the second highest change in module among all the activities surveyed and the fourth biggest influence on the indicator (-0.08 p.p. in -0.66%). The cumulative index in the year was -6.25%. The reduction in the prices of pulp in the foreign market was the most relevant factor for the result of this activity. In relation to the last 12 months, the change was of 8.95%.

Petroleum refining and biofuels - the prices in this sector changed, on average, -4.10% between February and March, the fourth negative figure in a row. As a result, the cumulative index in the year hit -7.08%, the lowest one for March since 2020 (-14.80%). In the cumulative indicator in 12 months, the change of -10.46% was the first negative change since January 2021 (-1.22%) and the most intense one since June 2020 (-19.18%).

This sector stood out due to the fact that it was the first change in the monthly indicator and the third one in the cumulative index in the year (both of them negative). Moreover, it was the first influence on the monthly indicator (-0.48 p.p. in -0.66%) and on the cumulative index in the year (-0.85 p.p. in -0.66%), and the second influence on the indicator of the last 12 months (-1.28 p.p. in -2.32%).

Other chemicals - the prices in the chemical industry retreated 1.41% in March over the immediately previous month. This sector stood out due to the deflation dynamics, which persists since the second semester of 2022. Having the third highest weight in the overall index and an intense deflation related to the industry average, this sector registered the third highest change in prices in absolute terms compared with the immediately previous month (-1.41%) and the second biggest influence on the overall index (-0.12 p.p.).

In the year, the prices at the factory gate closed the first quarter with a cumulative decline of -4.84%, which resulted in the third most intense influence on the aggregate result of industry, -0.42 p.p. in the total of -0.66% that the IPP accumulated in 2023. Compared with the same month in the previous year, the cumulative deflation in 12 months hit -19.85%. Compared with the other sectors investigated by the survey, the retreat just did not surpass that of the mining and quarrying industries and it was, in terms of influence, the major responsible for the overall result of industry, contributing with -2.03 p.p. to the change of -2.32% of the IPP in the period.

Following the dynamics of the foreign market, the lower prices of fertilizers guided, once again, the signal of the sectoral change (-4.10%) over that recorded in February.

Motor vehicles - in March, the change observed in the sector was 0.48%, the 33rd consecutive positive result in this indicator, accumulating an increase of 35.96%. During that interval, this sector has been impacted by increases in costs in its production chain, especially that of electronic inputs, due to the crisis in semiconductors, which helps to explain the higher prices noticed in the period. As a result, this sector accumulated a rise of 1.03% in the first quarter of 2023. The cumulative index in the last 12 months reached 7.86%.

This activity stood out for showing the fourth biggest influence on the cumulative indicator in 12 months, with 0.52 p.p. in -2.32% of the overall industry (the only positive influence among the four major activities in this indicator), as well as for having the fourth highest current weight in the calculation of the overall indicator, with a contribution of 7.30%.