Johannesburg - South Africa’s Producer Price Index unexpectedly slowed in July, dropping down to 3.3 percent from 3.7 percent in the previous month.
PPI measures the average change in selling prices received by local makers of goods and services. It is the first indicator of inflation each month.
Inflation last month moved up to 5 percent from the 4.7 percent figure it came in at in June. There are concerns that inflation will move out of the Reserve Bank’s 3 to 6 percent target range.
Statistics SA says the main contributors to the annual rate of 3.3 percent were food products, beverages and tobacco products (5.4 percent year-on-year and contributing 1.8 percentage points), metals, machinery, equipment and computing equipment (five percent year-on-year and contributing 0.7 of a percentage point) and wood and paper products (6.9 percent year-on-year and contributing 0.7 of a percentage point).
The stats agency notes the annual percentage change in the PPI for intermediate manufactured goods was negative 0.3 percent in July 2015, compared with negative 0.4% in June 2015. From June 2015 to July 2015, producer inflation for intermediate manufactured goods increased by 0.3 percent.
However, the agency notes, producer inflation for electricity and water jumped to 12.2 percent from 11.4 percent a month ago. This was driven mostly by the increased price of electricity, it explained.
Producer inflation in the mining sector declined 8.7 percent with non ferrous metals, followed by gold and other metals, and then coal, contributing the most to this drop, says Stats SA.
The annual percentage change in the PPI for agriculture, forestry and fishing was 6.4 percent in July 2015, up from 4.5% in June. The main contributor to this increase was agriculture, says the stats agency.
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