The Producer Price Inflation (PPI) has remained unchanged at 7.1 percent, year on year, in April, the same as the rate for March 2019.
The current position of the PPI has being driven by various factors such as the fall in the price index for the mining and quarrying sector and the petroleum price index, as well as a slight increase in the overall manufacturing and utilities sector.
Both the manufacturing and utilities sectors increased by 0.7 and 0.3 percentage points to record 7.5 percent and 1.1 percent, respectively. However, these increases were dampened by a 3.6 percentage point’s decrease in the mining and quarrying sector to record 15.9 percent
The Producer Price Index (PPI) measures the average change over time in the prices received by domestic producers for the production of their goods and services.
The manufacturing sector constitutes more than two-thirds of total industry in the computation of the PPI.
During the month of April 2019, three out of the sixteen major groups in the manufacturing subsector recorded inflation rates higher than the sector average of 6.1 percent. Manufacture of coke and refined petroleum products recorded the highest inflation rate of 17.2 percent, while producer prices for tanning and dressing of leather and manufacture of paper and paper products remained flat, recording inflation of 0.0 percent.
Petroleum Price Index
The producer price inflation rate in the petroleum sub-sector has been volatile both upwards and downwards over the past year. It was 22.7 percent in April 2018. Afterwards, it increased to 44.2 percent in June 2018, but decreased to 31.1 percent in September 2018. However, it increased again in to 36.1 percent in October 2018. It again resumed the downward trend to record 3.8 percent in January 2019, but increased consistently to record 17.2 percent in April 2019.
In April 2018, the producer price inflation rate for all industry was 6.4 percent. Subsequently, it increased continuously to record 8.2 percent in July
2018, however, it declined to 5.8 percent in September 2018. In October 2018, the rate increased to 7.2 percent, but declined continuously to record 3.4 percent in January 2019. Since then the rate resumed the upward trend to record 7.1 percent in April 2019.
By Joshua W. Amlanu