South Africa’s producer price index (PPI) rose by 9% year-on-year (y/y) in September from a 9,2% y/y increase in August, Statistics South Africa (Stats SA) said on Thursday.
The PPI declined -0,7%% on a monthly basis after August’s monthly rise of 1,5%.
The PPI was expected to have risen to 9% y/y, a survey of 11 economists by I-Net Bridge found. Forecasts ranged from 8,6% y/y to 10% y/y, with only three of the economists surveyed expecting a worsening above 9,2%.
Stats SA attributed the lower annual rate in September to decreases in the annual rates of change in the production price indices for mining and quarrying products, agricultural products and products of petroleum and coal.
These decreases were partially counteracted by increases in the annual rates of change for food at manufacturing, chemicals and chemical products, non-electrical machinery and equipment and transport equipment.
From August to September the PPI for all commodities for South African consumption decreased by -0,7%.
The annual increase of 9.0% in the PPI for all commodities for South African consumption was due to annual increases in the price indices for locally produced commodities (+6,9 percentage points) and for imported commodities (+2,1 percentage points), Stats SA noted.
The annual percentage change in the PPI for locally produced commodities for consumption in South Africa was lower at 9,2% in September — 0,4 of a percentage point lower than the corresponding rate in August.
Stats SA noted that monthly decreases occurred in the price indices for electricity, products of petroleum and coal, gas, steam and water and radio, television and communication equipment and apparatus.
These were slightly counteracted by relatively large monthly increases in the price indices for fishing products, agricultural products, mining and quarrying products, food at manufacturing, office, accounting and computing machinery, textiles and made-up goods, leather and leather products, non-electrical machinery and equipment, wearing apparel, chemicals and chemical products, non-metallic mineral products and transport equipment, Stats SA added.
Dennis Dykes, the chief economist at Nedbank, said the figure was pretty much in line with what they were expecting.
“I have not seen the full break down but it was largely because of the cut in electricity and energy prices,” he said.
Dawie Roodt, the chief economist at the Efficient group said the PPI was better then expected.
“I think the effect of rand is less than what we expected.”
Annabel Bishop, an economist at Investec said: “PPI inflation came out in line with consensus expectations. A seasonal reduction in electricity costs was the chief contributing factor, although price pressures in general were fairly subdued on the month, other than that of food. We continue to belive that the SARB will hike interest rates by 50bp at its December MPC meeting.” – I-Net Bridge