Czech producer prices fall more than expected in Sept 2014

By bne IntelliNews October 16, 2014

Czech industrial producer prices edged down 0.3% in September 2014 after staying flat the month before as rising manufacturing charges were offset by declining mining and energy costs, data from the statistics office showed on October 16. The reading exceeded market expectations as analysts polled by Dow Jones Newswires forecast a 0.1% drop.

Manufacturing producer charges, which have the strongest weight in the index, increased by 1.5% y/y in September, easing from a 2.1% hike the month before. The growth was supported by rising prices in all sub-indices except for food products, beverages and tobacco prices that ticked lower by 0.8% y/y.

Prices of electricity, gas, steam and air conditioning declined by 8.6% y/y for the second straight month in September, while water supply charges grew by 3.4% for the ninth month running. Mining and quarrying prices continued to fall but their annual decline softened to 1.9% in September from 3.6% in August.

In monthly terms, industrial producer prices in the country also fell by 0.3% in September, again following a no-change in August.

Agricultural producer prices fell for the 14th consecutive month in September and at the deeper rate of 2.7% than August’s 1% y/y drop. The decline came as crop prices shrank by 7.2%, while the growth in animal products prices weakened to 3.4% from 6.7% in the previous month. On a monthly basis, agricultural prices dropped by 3.4% from August when they went down by 2.5%.

Construction work prices picked up 0.1% on the month and were by 0.6% higher on the year in August. Prices of market services went up 0.9% from August and grew 0.8% on an annual basis.

The PPI data so far in 2014 bolsters the central bank’s strategy to keep the koruna weak amid rising deflation worries. The indicator suggests that consumer price inflation, which accelerated to 0.7% y/y in September from 0.6% y/y in August, will stay low in the following months. The Czech central bank expects inflation to return to its 2% target in the second half of 2015.

Related Articles

Petr Kellner agrees to buy Skoda Transportation for reported €400mn

Petr Kellner, Central Europe’s richest man, has agreed to buy Skoda Transportation, the Czech manufacturer of electric trains, trams and ... more

CEFC and Penta reported to be bidding together for CME

CEFC, the acquisitive Chinese energy group, and Penta Investments, the closely-held Slovak financial group, are bidding together for Time Warner’s stake in Central European Media Enterprises (CME), ... more

Growing threat of pay clash at Czechia's Skoda Auto may be sign of things to come

The unions and management at Skoda Auto, the largest Czech automaker, seem on course for a big pay rise disagreement that may be part of an outbreak of such confrontations throughout industry in the ... more