In August 2024, industrial prices changed by 0.61% compared to July 2024, the seventh positive result in a row. In this comparison, 18 of the 24 industrial activities saw price increases. The cumulative result for the year was 4.76%, while the cumulative result for 12 months was 6.42%. In August 2023, the IPP was 0.75%.

The Producer Price Index (IPP) for Mining and Quarrying and Manufacturing Industries measures “factory-gate” prices of products, without taxes and freight, and covers the broad economic categories.

In August 2024, industrial prices changed by 0.61% compared to July 2024. 18 of the 24 industrial activities investigated in the survey showed positive price changes compared to the previous month. In comparison, 21 activities had presented lower average prices in July compared to the previous month.

The four most intense changes were in mining and quarrying industries (-5.06%); printing (2.85%); other chemical products (2.42%); and furniture (2.04%).

Food was the most prominent industrial sector in the composition of the aggregate result, when comparing the prices of August and July. The activity was responsible for 0.32 percentage points (pp) of influence in the 0.61% change of the general industry. Also in this regard, other activities that also stood out were mining and quarrying industries, with -0.25 pp of influence, other chemical products (0.19 pp) and oil refining and biofuels (0.12 pp).

The cumulative rate for the year was 4.76% in August. For comparison purposes, last year (2023) the cumulative rate up to the month of August was -6.47%. The value of the cumulative rate in the year up to this reference month is the fifth highest ever recorded for a month of August since the beginning of the time series, in 2014.

The sectors with the greatest influence on the aggregate result were: basic metals: 0.90 pp; other chemical products: 0.87 pp; food: 0.85 pp; and pulp and paper: 0.45 pp

In the 12-month period, calculated by comparing the prices of August 2024 to those of August 2023, the change was 6.42% in this reference month. In the previous month (July/2024), this same indicator had registered a rate of 6.58%.

The greatest influences on the result came from the following sectors: food (1.72 pp); other chemical products (0.98 pp); oil refining and biofuels (0.76 pp); and basic metals (0.76 pp).

Among the broad economic categories, the August result had the following repercussions: -0.18% change in capital goods (BK); 0.38% in intermediate goods (BI); and 1.12% in consumer goods (BC), with the change observed in durable consumer goods (BCD) being 0.68%, while in semi-durable and non-durable consumer goods (BCND), it was 1.20%.

The main influence came from consumer goods, whose weight in the composition of the general index was 37.00% and accounted for 0.41 pp of the 0.61% change in the mining and quarrying and manufacturing industries.

The list is completed by intermediate goods, with an influence of 0.21 pp and capital goods with -0.01 pp. In the case of consumer goods, the influence observed in August is divided into 0.04 pp, which was due to the change in the prices of durable consumer goods, and 0.37 pp associated with the change in semi-durable and non-durable consumer goods.

In the year to date, the change reached 3.20% in the case of capital goods; 4.14% in intermediate goods; and 6.03% in consumer goods - with durable consumer goods accumulating a change of 2.22%, while semi-durable and non-durable consumer goods, 6.81%.

In terms of influence on the cumulative result in the year, capital goods were responsible for 0.25 pp of the 4.76% recorded in the general industry until August of this year. Intermediate goods, in turn, accounted for 2.31 pp, while consumer goods exerted an influence of 2.20 pp on the aggregate result of the industry, an influence that is divided into 0.14 pp due to changes in the prices of durable consumer goods, and 2.07 pp caused by changes in semi-durable and non-durable consumer goods.

In the 12-month period, the change in the prices of capital goods was 3.19% in August 2024. The prices of intermediate goods, in turn, changed 6.17% in this one-year period and the change in consumer goods was 7.51%, with durable consumer goods showing a price change of 2.54%, and semi-durable and non-durable consumer goods of 8.54%.

With a weight of 55.40% in the calculation of the general index, intermediate goods were responsible for 3.42 pp of the 6.42% change accumulated in 12 months in the industry, in this reference month. In the result for August 2024, there was also an influence of 2.75 pp from consumer goods and 0.25 pp from capital goods.

The result for consumer goods, in particular, was influenced by 0.16 pp by durable consumer goods and by 2.59 pp by semi-durable and non-durable consumer goods, the latter accounting for 83.59% of the index for that major category.

Mining and quarrying industries: the -5.06% change, when comparing August prices to July prices, marks the return of negative price behavior after two months of increases. As a result, the year-to-date figure was -3.59%, compared to 5.01% in August 2023. In the 12-month period, the change was 0.18%, a value below that seen in July, 12.44%.

The emphasis given to mining and quarrying industries is due to the behavior of prices between July and August. In terms of change, it was the most intense (and the only negative) among the four highlighted sectors. In terms of influence, it was the second (-0.25 pp, at 0.61%).

There was a negative change in the prices of the two most important products: “crude petroleum oils” and "iron ore and its concentrates, exc. pelletized/sintered”, a movement that follows what is observed in the international market.

Food: as it has been the case since April of this year, the price change observed from the previous month, July, to the current month, August, was positive, now at 1.33%. As a result, in the year, the sector accumulated a change of 3.42%, a different scenario from that of August 2023, when a change of -6.14% was accumulated. In terms of cumulative change in 12 months, the change of 7.10% in August is the highest since October 2022, 8.15%.

The influence of the four most prominent products on the change observed from July to August accounted for 0.86 pp out of 1.33%, that is, the other 39 products were responsible for the remaining 0.47 pp. In terms of change and influence, there are only two coincidences: “roasted and ground coffee” and “frozen beef”. “Fresh or chilled pork” and “dried, salted or smoked beef” complete the four highlights in terms of change. In terms of influence, the other two products are: “fresh or chilled beef” and “semi-milled or milled rice, whether or not polished or burnished”. The behavior of beef - fresh or frozen - is in line with both a lower supply of animals for slaughter and an increase in demand, which responds to the positive behavior of the labor market. Rice, in turn, responds to the increase in demand, particularly from wholesalers to producers. Finally, the coffee market scenario continues to show the characteristics indicated in the latest reports: global supply is being impacted by the (weather) problems faced by producers in Vietnam.

Paper and pulp: this activity stood out among all sectors of the general industry for presenting the highest cumulative result in the last 12 months, with a change of 17.24%, the highest one observed since December 2022, 19.45%. In addition, it presented the second highest change in the cumulative index for the year, with 14.91%.

In the monthly indicator, the change in activity was negative (-0.14%), the first negative result after six consecutive months of growth. The products that presented the most intense changes were “notebooks” and “cardboard/paperboard, uncoated or coated with inorganic matter”, with negative results, and “disposable diapers of any material” and “kraft paper for packaging, uncoated”, with positive changes. In turn, those that had the greatest influence – accounting for -0.18 pp in -0.14% – were “cardboard boxes, corrugated”, “disposable diapers of any material”, “uncoated kraft paper for packaging” and “chemical wood pulp, soda/sulfate, except for dissolving pulp”. In the latter case, it is worth mentioning that it was the only product, among the four, with a negative price change, following a recent slowdown in global demand, especially from markets such as China and Europe, and being the main responsible for the negative sectoral result.

Oil refining and biofuels: from July to August, the sector's prices changed by 1.17%, the seventh consecutive positive change. As a result, the cumulative total for the year reached 1.65%, against -19.96% in August 2023. The cumulative total for 12 months fell compared to July. In August, 7.40%, in July, 14.17%. This is explained by the basis of comparison. In August 2023, the sector's prices increased by 7.55%, the first positive result after eight months and the highest since March 2022 (10.84%). Therefore, the basis of comparison in the July calculation was 159.41, while in August it was 171.44. The upward movement in refining prices is in line with the increase in the prices of "crude oils", with positive change in six of the eight months of the year and a positive balance for the year.

With a current weight of 10.35%, the second among industrial activities, the behavior of the sector's prices placed it as the fourth largest influence on the perspective of the monthly change (0.12 pp, at 0.61%), and the third when considering the cumulative change in 12 months (0.76 pp, at 6.42%).

Among the four most influential products (according to price behavior from July to August), the only one with a negative change was “fuel oils, except diesel”. Of the two products with the greatest weight in the sector – “diesel oil” and “gasoline, except for aviation” – only the latter stands out in this perspective, with a positive influence. The influence of the four highlighted products was 0.72 pp, at 1.17%.

Other chemical products: from July to August 2024, average prices in the chemical industry increased by 2.42%, 0.34 percentage points (pp) above the rate of 2.08% recorded in July. This is the third consecutive result of price increases, a period in which they accumulated 8.44%. In the year, the indicator has accumulated an increase of 11.33%, and, in the last 12 months, of 12.67%, a result higher than the rate observed in August 2023 (-30.77%), a period in which the sector was going through a deflationary sequence that began in the second half of 2022, in addition to being the highest positive result since September 2022, 13.57%. The increase of 2.42% in August placed the sector in the spotlight among the industrial activities surveyed by the IPP. With the third largest weight in the overall calculation of the IPP (8.18%), the sector also contributed 0.19 pp to the 0.61% change in general industry.

The increase in average prices for the activity (2.42%), observed between July and August 2024, was also accompanied by the three reporting groups investigated, with emphasis on the increases of 5.35% in “manufacture of resins and elastomers”, 1.48% in “inorganic chemical products” and 0.95% in “manufacture of agricultural pesticides and household disinfectants”. Changes in the costs of inputs and increases associated with margin recovery strategies are among the main reasons presented by companies for the price increases observed in August.

The price change trend of the sector continues to accelerate, having gone from 2.04% in March to 11.33% in August 2024, with fertilizers - products that are heavily dependent on imports - and resins and elastomers playing a leading role in explaining the results accumulated in the first eight months of 2024.

Basic metals: in August, the price change of the activity was 0.22% compared to the previous month, being the ninth consecutive positive result in this indicator, but the least intense in this sequence. As a result, in the first eight months of 2024, the activity accumulated an increase of 15.49%, standing out as the largest change and greatest influence (0.90 pp in 4.76%) in this indicator among all 24 activities surveyed. In the 12-month period, prices in August 2024 were, on average, 12.43% higher than those in August 2023. This change also stands out, among other activities, as the third most intense in this indicator, in addition to being the fourth main influence (0.76 pp in 6.42%).

Of the four products with the greatest influence, two of them followed the same direction as the sector and presented positive results in the month, one product from the non-ferrous metals group (“gold for non-monetary uses”) and another from the steel group (“carbon steel wire rod”). Two other products, both from the steel group, followed in the opposite direction and more than offset the increase in the first two: “carbon steel ingots, blooms, billets or plates” and “sheets, coils, strips and tapes of steel, re-rolled”. These four most influential products impacted the activity result by -0.15 pp, therefore, the influence of 0.37 pp of the other 20 products analyzed guided the sectoral result in the month.

The group with the greatest influence, both on the monthly result and on the results of the longer-term indicators, was non-ferrous metals. Their changes are usually linked to international stock exchange prices and have been impacted, mainly, by changes in the price of aluminum and gold. It is also worth remembering the importance of the exchange rate in explaining the sector's result: in August, the dollar showed a slight appreciation of 0.2% against the real, but it has already accumulated an increase of 13.4% in 2024 and 13.2% in the last 12 months.

Keywords: Índice de Preços ao Produtor (IPP) é de 0, 61% em agosto