South Africa's annual headline producer price inflation accelerated more than expected, hitting a five-month high of 3.6% in May, up from 3.0% in April, data released by Statistics South Africa showed. Consensus expectations were for a PPI inflation of 3.3% last month, according to a Business Day survey of eight economists.
Compared to the previous month, factory prices rose 0.8% in May, easing from a 0.9% growth in April.
The main contributor to the annual headline producer inflation last month again was the heavyweight group of foods, beverages and tobacco products with a 6.4% y/y growth and a 2.2pp contribution to the PPI, (+5.4% y/y, 1.8pp contribution in April).
At the same time, deflation in the group of coke, petroleum, chemical, rubber and plastic products, softened to 6.0% y/y from 7.5% y/y in April. The group contributed -1.3pp to the overall price development versus -1.6pp in April.
Producer prices are a key preliminary indicator for the dynamics in consumer price inflation, which edged up to 4.6% y/y in May from 4.5% in April.
As of January 2013, Statistics South Africa releases five separate industry-specific PPIs, with final manufactured goods representing the headline number. The other four PPIs cover agriculture, forestry and fishing; mining and quarrying; electricity and water; and intermediate manufactured goods (see the table below).
|Producer price inflation||May-15||Apr-15||May-15||Apr-15|
|Final manufactured goods||3.6%||3.0%||0.8%||0.9%|
|Intermediate manufactured goods||-0.4%||-0.2%||0.3%||-0.7%|
|Electricity and water||9.9%||10.4%||0.9%||4.7%|
|Agriculture, forestry and fishing||3.1%||4.5%||-2.3%||1.7%|
|Source: Statistics South Africa|
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