Producer price inflation eases to 4.1% in January

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Producer price inflation (PPI) eased to 4.1% for January 2019, compared to 5.2% reported in December 2018.

Statistics South Africa (Stats SA) on Thursday released inflation figures for manufacturing. "From December 2018 to January 2019 the PPI for final manufactured goods decreased by 0.8%," Stats SA's report read.

The main contributors to the annual 4.1% rate were coke, petroleum, chemical, rubber and plastic products. This was followed by food products, beverages and tobacco products.

Paper and printed products were also among the main contributors to inflation.

The main contributors to the monthly decrease of 0.8% were coke, petroleum, chemical, rubber and plastic products.

The annual change in inflation for intermediate manufactured goods was 3.8% in January. This was down from 5% reported for December 2018.

Further decline

The Steel and Engineering Industries Federation of Southern Africa (Seifsa) raised concerns over the further decline in the inflation figures for intermediate manufactured goods.

"The deceleration in the PPI for intermediate manufactured goods is in line with a slowdown in the PPI for final manufactured goods," said Seifsa economist Marique Kruger.

"A decreasing trend in the PPI for intermediate manufactured goods does not bode well for producers in the sector, who have less leeway to recover the losses incurred due to volatility in input costs, thereby preventing them from improving on margins," Kruger explained.

Stats SA also provided details on the annual change in water and electricity prices, which was 5.5% in January, compared to 7.7% reported in December 2018.

Inflation for mining was 7.7% for January 2019. Prices were only up 6% in December 2018.

Agriculture, forestry and fishing reported a -3% annual change in process for January 2019. Prices were down 3.9% in December 2018.

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