Prices in the industrial sector had increase of 1.21% in July, over the previous month, after a change of 1.01% from May to June. In terms of the cumulative index in the year, the indicator reached 11.46%, the biggest rate for the month of July since the beginning of the time series. The cumulative index of the last 12 months, the rate was 18.04%, falling over the index of June (18.78%).
The data released today (26) by the IBGE come from the Producer Price Index (IPP), which measures prices of products “at factory gate”, that is, free of taxes and freight. Seventeen of the 24 activities in mining and quarrying and manufacturing industry had increase in July.
The greatest influences on the result of July (1.21%) came from food (0.69 percentage points), petroleum refining and biofuels (0.46 pp) and, falling, basic metals (-0.27 pp). Conversely, the biggest monthly changes were in manufacture of tobacco products (7.01%), basic metals (-4.03%), petroleum refining and biofuels (3.45%) and food (2.97%).
“The month’s highlights were in the groups of food and petroleum refining and biofuels. Both account together for 1.15 percentage points of the change of 1.21% occurred in July” emphasizes IPP manager Manuel Campos.
The 2.97% high in the sector od food, activity with the biggest weight in July (23.66%), had a great impact in the calculation of the index of the month. The most influential products were milk and its derivatives, followed by sugar, soybean derivatives and frozen poultry and offal”, explains the analyst.
On the other hand, the increase of 3.45% in July for petroleum refining and biofuels contributed to keep the group in the first position both in the cumulative change of the year (35.99%) and in the index of the last 12 months (59.94%) “Diesel fuel and gasoline were the major responsible for the increase. The value in the last 12 months, although high, stands far from the 106.57% record occurred in May 2021”, Mr. Campos claims.
As to basic metals, in the comparison between July and June, the price change of the activity was of -4.03%, the fourth negative change of prices in the year and the sharpest one. This way the sector accumulated a change of -1.32% in the year and 2.09% in 12 months.
The change of 1.21% from June reflected in the major economic categories in the following way: capital goods, 2.14%; intermediate goods, 1.08%; and consumer goods, 1.28%, with -0.01% being the change observed in durable consumer goods and 1.51% in semi and non-durable consumer goods. The major influence was exerted by intermediate goods, whose weight in the overall index was 59.10%, and it accounted for 0.64 pp of the 1.21% change.
The manager says that the changes in the exchange rates in the period also explain the results of the index. “The dollar appreciation over the real by 6.3%, biggest positive change in the last 12 months, increased the exports’ prices, as for example, soybean bran, and also the cost of imported inputs and raw material.
More about the survey
The IPP aims at measuring the average change of sale prices received by the domestic producers of goods and services, as well as their evolution over time, signaling the short-term inflationary trends in Brazil. It is a key indicator for the macroeconomic follow up and, consequently, a valuable analytical instrument for decision makers, either public or private.
The survey investigates, in slightly more than 2,100 enterprises, the prices received by producers, free from tax, tariffs and freight, defined according the most usual commercial practices. Nearly 6 thousand prices are collected monthly. The complete tables with the results are available at Sidra.