PPI leaps to an almost two-year high driven by hike in food and fuel
JOHANNESBURG - PRODUCER prices for final manufactured goods in South Africa climbed to an almost two-year high in March, driven by food, beverages and tobacco products.
Data from Statistics South Africa (StatsSA) yesterday showed that annual producer price inflation (PPI) increased by 5.2 percent in March, up from 4 percent in February.
StatsSA said this was the largest annual rise in headline PPI since June 2019, when the rate was 5.8 percent, and was above market expectations of 4.5 percent.
Food products, beverages and tobacco products went up by 6.8 percent year-on-year. Coke, petroleum, chemical, rubber and plastic products rose by 4.2 percent, while metals, machinery, equipment and computing equipment increased by 5.2 percent over the same period.
On a monthly basis, producer prices inched up 1.3 percent, following a 0.7 percent increase in February and above market consensus of a 0.8 percent rise.
Investec economist Lara Hodes said the increase in food prices was largely broad based. Meat and meat products inflation rose to 8 percent following its deceleration to 5.7 percent in February.
Inflation within the grain mill products and starches category lifted to 19.9 percent from 18.3 percent in February. Hodes said a further large fuel price increase in March saw the coke, petroleum, chemical, rubber and plastic products move out of deflationary territory.
Petrol rose by 65 cents per litre and diesel by 56c per litre during the month because of international petroleum costs and the movement in the rand/ dollar exchange rate.
“Inflation within the metals, machinery, equipment and computing equipment segment of the PPI basket increased marginally in March on a year-on-year basis,” Hodes said.
“Demand for machinery and equipment has increased in line with the pick-up in economic activity.”
StatsSA said the annual percentage change in PPI for intermediate manufactured goods was 11.2 percent in March, from 9.9 percent in February, rising by 1 percent month-on-month. The PPI for agriculture, forestry and fishing fell to 7.2 percent from 10 percent in February.