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25 Oct 2007 12:18
South Africa’s producer price index (PPI) rose by 9,4% year-on-year (y/y) in September, unchanged from August, Statistics South Africa (Stats SA) data on Thursday showed.
The PPI declined 0,7% on a monthly basis after August’s monthly increase of 0,7%.
PPI was expected to have increased at a slightly higher 9,5% year-on-year (y/y), a survey by I-Net Bridge found. PPI was at 9% y/y a year ago.
Stats SA attributed the annual rate in September, compared with August, to annual increases in the annual rates of change for agricultural products (from 25,1% to 26,1%), food at manufacturing (from 15,4% to 16%), electricity (from 5,9% to 6,3%), furniture (from 5% to 5,1%), wearing apparel (from 2% to 3%), and radio, TV, and communication equipment (from 2,2% to 2,3%).
However, these increases were partially counteracted by decreases in the annual rate of change for mining and quarrying products (from 10,9% to 7,9%), basic metals (from 10,3% to 8,8%) and non-electrical machinery and equipment (from 6,5% to 5,9%).
The annual increase of 9,4% in the PPI for all commodities for South African consumption was due to annual increases in the price indices for locally produced commodities (7,2 percentage points) and for imported commodities (2,2 percentage points), Stats SA noted.
The annual rate of increase in the PPI for locally produced commodities for consumption in South Africa was recorded at 9,7% in September—0,4 of a percentage point higher than the corresponding rate in August.
Dawie Roodt, economist Efficient Group, said of the PPI figures: “The figures are slightly better than expected, but after yesterday’s [Wednesday] shocking numbers we are seeing no real change at all.
As far as interest rates go, if the Reserve Bank wants to do its job it’s going to have to raise rates in December and maybe in March as well.”
Ridle Markus, economist at Absa, said: “The PPI figure is in line with market expectations, which is good news following yesterday’s shocker of CPI and CPIX figures.
Razia Khan, economist at Standard Chartered, said: “A pleasant surprise with the South African PPI release—in contrast to yesterday’s awful consumer inflation print.
“Although a decline in PPI is to be expected at this time of the year, this will be welcome news to the market.—I-Net Bridge
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