South Africa’s annual PPI inflation surprisingly eases to 3% in April

By bne IntelliNews May 28, 2015

South Africa's annual headline producer price inflation surprisingly eased to 3.0% in April from 3.1% in March, data released by Statistics South Africa showed. Economists expected the PPI inflation to accelerate to 3.4% last month, according to a Business Day survey.

Compared to the previous month, factory prices rose 0.9% in April, slowing from a 1.8% growth in March.

The main contributor to the annual headline producer inflation last month again was the group of foods, beverages and tobacco products with a 5.4% y/y growth and a 1.8pp contribution to the PPI, (+6.0% y/y, 2.0pp contribution in March).

On the other hand, deflation in the group of coke, petroleum, chemical, rubber and plastic products, softened to 7.5% y/y from 9.3% y/y in March. The group contributed -1.6pp to the overall price development versus -2.0pp in March.

Producer prices are a key preliminary indicator for the dynamics in consumer price inflation, which quickened to 4.5% y/y in April from 4% in March.

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 Apr-15 Mar-15 Apr-15 Mar-15
  y/y y/y m/m m/m
Final manufactured goods  3.0% 3.1% 0.9% 1.8%
Intermediate manufactured goods -0.2% 0.9% -0.7% 0.3%
Electricity and water  10.4% 8.6% 4.7% -1.2%
Mining -4.7% -4.4% -1.0% -0.1%
Agriculture, forestry and fishing 4.5% -1.0% 1.7% 1.5%
Source: Statistics South Africa        
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