In July 2023, industry prices changed by -0.82% from June, recording their sixth consecutive drop. In this same comparison, prices of 16 of the 24 industrial activities dropped. The cumulative index in the year stood at -7.23%, the lowest one for a month of July since the beginning of the time series in 2014. The cumulative index in 12 months was -14.07%.

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.

The four biggest changes in the monthly indicator were recorded by: mining and quarrying industry (5.08%); wearing apparel (3.12%); oil refining and biofuels (-2.91%); and basic metals (-2.59%).

On the other hand, the most influential sectors were: food products (-0.33 percentage points); petroleum refining and biofuels (-0.29 p.p.); mining and quarrying industries (0.22 p.p.) and basic metals (-0.17 p.p.).

The cumulative index in the year was -7.23%. For the sake of comparison, the cumulative index in the year up to July 2022 was 11.37%. The cumulative index up to July 2023 was the lowest for a month of july since the start of the time series in 2014.

The highest cumulative changes in the year among the activities were: petroleum refining and biofuels (-25.57%), other chemicals (-18.47%), pulp and paper (-16.01%) and wearing apparel (9.30%).

The main influences came from petroleum refining and biofuels (-3.06 p.p.), other chemicals (-1.62 p.p.), food products (-1.52 p.p.) and pulp and paper (-0.54 p.p.).

The cumulative index in 12 months reached -14.07% in July. In the previous month, the indicator had registered -12.37%. The sectors that recorded the four main price changes in the July/June comparison were: petroleum refining and biofuels (-39.23%); other chemicals (-32.93%); mining and quarrying industries (-28.31%); and basic metals (-15.21%).

The most influential sectors considering the aggregate result were: petroleum refining and biofuels (-5.33 p.p.), other chemicals (-3.24 p.p.), food products (-2.65 p.p.) and and mining and quarrying industries (-1.57 p.p.).

Among the broad economic categories, the result of July was as follows: -0.42% of change for capital goods; -0.63% for intermediate goods; and -1.19% for consumer goods, with a change of -0.22% for durable consumer goods, whereas it was -1.39% for semi and non-durable consumer goods.

The main contribution came from consumer goods, whose weight on the compasition of the overall index was 36.95% and accounted for -0.44 percentage poonts of the -0.82% change of industry.

Intermediate goods (accounting for -0.35 p.p.) and capital goods (for -0.03 p.p.) complete the list. In the case of consumer goods, the influence observed in July was split into -0.01 p.p., due the change in prices of durable consumer goods and -0.43 p.p., associated with the change in prices of semi and non-durable consumer goods.

In the cumulative index in the year the change in the broad economic categories reached: -1.69%, in the case of capital goods; -10.84% in intermediate goods; and -2.51% in consumer goods, in which durable consumer goods accumulated a change of 1.54%, whereas semi and non-durable consumer goods, -3.30%.

Capital goods accounted for -0.13 p.p. of the rate of -7.23% registered by the overall industry up to July this year. Intermediate goods accounted for -6.22 p.p., whereas consumer goods accounted for -0.88 p.p. in the aggregated result of industry, an influence shared into 0.09 p. p, due to changes in durable consumer goods and -0.97 p.p due to changes in semi durable and non-durable consumer goods.

Considering the cumulative index in 12 months, the change of prices of capital goods was 0.81% in July 2023. The prices of intermediate goods, in turn, changed -19.80% in the period of one year and the change in consumer goods was of -7.08%, with durable consumer goods having changed by 3.51% and semi and non-durable consumer goods, -9.01%.

In terms of influence, representing 7.90% of the overall index, capital goods accounted for 0.05 p.p. of the cumulative change of -14.07% in industry for 12 months. There was, also, an influence of -2.42 p.p. from consumer goods and of -11.70 p.p. from intermediate goods. The result of consumer goods was particularly influenced by durable consumer goods (0.18 p.p.) and semi and non-durable consumer goods (-2.60 p.p.), the latter with a weight of 82.88% in the index of this broad category.

Mining and quarrying industry – The prices of July rose 5.08% from June. That did not prevent the cumulative index in the year from being negative (-1.43%), as well as prices in the month against the same month a year ago (-28.31%), which has taken place since June 2022.

The result of the sector was highest in the analysis of July versus June and the third one in the index of the last 12 months. On the other hand, that was the third main contribution in July against June (0.22 p.p., out of -0.82%) and the fourth one cumulative in 12 months (-1.57 p.p., out of -14.07%).

food products– From June, prices in the sector dropped 1.36%. That is the third consecutive negative result in a row in this comparison, and the fifth result in the year. The cumulative index in year reached -6.29%. It is worth mentioning that, in this case, there had been no negative result since July 2019 (-0.31%) and it is the first one surpassing this current result is the one in July 2017, -6.56%.

In the comparison july 2023/July 2022, the change reached -11.23%, the main decrease in the series. The index number for July 2022 is the highest in the series, 188.97.

The highlight of the sector results from the fact that the first influence in the comparison July versus June (-0.33 p.p., out of -0.82%) and the third one cumulative in the year (-1.52 p.p., out of -7.23%) and in in the last 12 months (-2.65 p.p., out of -14.07%).

Among the four most influential products to the monthly result, three belong to “slaughter and manufacturing of meat products” and one to “sugar production and refining”. The change in prices of the four products was negative. As for meats, including beef, chicken and pork, two factors accounted for the drop: a bigger supply of animals to be slaughtered abd the aprreciation of our currency, the real. As for granulated sugar, it must be taken into consideration we are nw at the peak of the harvest season.

Pulp and paper –The activity recorded a positive change of 0.86% in July from June, having interrupted the sequence of negative results observed since December 2022. This result partially made up for the cumulative figure in the year (-16.01%), o terceiro maiorthe third highest one in general industry. In relation to the last 12 months, the change was of -12.30%.

Results for short and long term indicators in the sector corroborate the participation in the dynamics of international pulp prices which, after a 2022 marked by strong recomposition of stocks, there was decrease in the first semester of 2023. There was, in July some recovery of the demand for this product, leading to a rise in the international market. The domestic price followed those in global markets, despite the exchange appreciation. Other products of the sector made a similar movement of increase in July.

Petroleum refining and alcohol products – As well as observed since December 2022, the change of prices from the previous month was negative in July. -2.91% As a result, the cumulative index in the year reached -25.57%, the main decrease in the same month in the series and the first negative result since July 2020 (-16.62%). As for the cumulative index in 12 months, the change was -39.23%, and also the most significant negative result in the series. It is worth mentioning that the comparison is against the month whose index-number is the highest, July 2023, 262.34.

The highlight given to the sector is due to the fact that, in terms of change, that was the third most significant (negative) one (in the monthly comparison and the first one cumulative in the year and cumulative in 12 months (both negative). In terms of influence, it was in secnd position in the July/June comparison (-0.29 p.p., out of - 0.82%) and in the first one cumulative in the year (-3.06 p.p., out of -7.23%) and cumulative in 12 months (5.33 p.p., out of -14.07%).

Other chemicals – The prices of chemicals dropped for more than a month at factory gate: in July they retreated by 1.79% in relation to the average prices in June. Although the fall of prices was a continuation of the deflation sequence (which started in the second semester of 2022), the magnitude of decrease in this month of reference was less intense than observed in the three previous months and that difference can be associated with a slight change in relation to the status in the last quarter.

From the perspective of a longer period of time, the occurrence of more than one general reduction of prices in July (in spite of local demands) caused the cumulative index in the year to reach -18.47% and in 12 months the sector had a cumulative reduction of 32.93% in prices. In both cases the indicators and the chemical insdustry was a highligh, due to the magnitude of rates registered and the influence on the general result of industry featuring among the four activities with the highest absolute figures recorded in these comparisons within all those surveyed by the IPP.

Basic metals– In July, the change of prices of this activity reached -2.59% from the previous month, third consecutive negative result for this indicator. Among all the activities analyzed in the survey, that was the fourth most significant change, and the fourth main influence on the general result of industry (-0.17 p.p. out of -0.82%). In the first seven months in the year, the activity recorded a cumulative decrease of 4.95%. And in the last 12 months, the sector had a cumulative drop of 15.21% in the period, causing the activity to be a highlight in terms of the cumulative indicator in te last 12 months, recording the fourth main change among the 24 activities surveyed by the IPP.

The sector has been mainly influenced by the economic groups of non-ferrous metals (which are usually related to the value of international stock markets and have been mainly affected by the reduced prices of aluminium and the appreciation of the real) and basic metals, mainly affected by the recomposition of stocks in the consumer chain and by the prices of iron ore (which, in spite of the increase observed in July, has recorded fall of prices).