JOHANNESBURG – PRODUCER prices in South Africa are expected to continue rising in the short term after increasing the most in two and a half years last month.
Data from Statistics South Africa (StatsSA) yesterday showed that the Producer Price Index (PPI) for finished manufactured goods jumped 6.7 percent in April from the same month a year earlier.
The PPI has been pushed up by the prices of coke, petroleum, chemicals, rubber and plastics, food, beverage and tobacco products, and metals. The April PPI impression was slightly below market expectations of 6.8 percent.
The jump follows a 5.2% rise in March and a low 3.5% in January. StatsSA said this was the highest producer inflation rate since November 2018.
Coke, petroleum, chemicals, rubber and plastic products rose 11.9%, while metals, machinery, equipment and computer hardware rose 8%.
Inflation for meat and meat products hit a sharp 12 percent, from 8 percent in March, while inflation within the dairy and “other food” categories eased somewhat. attenuated.
Investec economist Lara Hodes said the PPI rose in April largely due to the increase in the coal and petroleum products category.
“A marked increase in inflation within the Coke, Petroleum, Chemicals, Rubber and Plastics product group, in which the dynamics of fuel prices are captured, has largely underpinned the notable increase in the overall result,” Hodes said.
“The weak statistical base effects generated by the pandemic are expected to support both annual consumer price inflation and short-term PPI readings,” she said.
On a monthly basis, producer prices rose 0.7 percent after rising 1.3 percent the previous month, and slightly below market consensus of an increase of 0.8 percent.
The Southern African Steel and Engineering Industries Federation (Seifsa) said the PPI hike was indicative of the cost pressures manufacturers were facing due to rising input costs.
Seifsa’s chief economist, Chifipa Mhango, said factors contributing to the increase included rising transportation and energy costs, as well as mining products.
Mhango said the PPI rise will continue.
“PPI data shows that manufacturers pass these costs on to consumers, which is also why we are seeing consumer price inflation rising, which reached 4.4% in April,” he said. declared. “The global PPI will increase, as will oil prices and mining producer prices.”