April producer inflation accelerates to 6.7% as input costs rise

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April producer price inflation increased to 6.7%, year-on-year.
April producer price inflation increased to 6.7%, year-on-year.
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April's annual producer inflation accelerated to 6.7%, in line with economists' expectations.

Stats SA on Thursday released producer inflation data. On a month-on-month basis, producer inflation increased 0.7%.

According to Stats SA, the main contributors to annual inflation were food products, beverages and tobacco products, which increased 6.7%; products in the coke, petroleum, chemical, rubber and plastic category increased by 11.9%; and metals, machinery, equipment and computing equipment increased by 8%.

Investec economist Lara Hodes said that the low base effect from April 2020, at the height of Covid-19 lockdown restrictions, was reflected in the lift in this year's print.

The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) noted that producer inflation is on an increasing trend, having lifted from 3.5% in January.

"The rise in producer price inflation is indicative of the cost pressures manufacturers are currently facing as a result of rising input costs," the statement read.

SEIFSA Chief Economist Chifipa Mhango said that the increase is linked to rising costs in transport and energy and mining products.

"The PPI data shows that manufacturers are passing these costs on to consumers, which is also why we see a rise in consumer price inflation, which rose to 4.4% in April," he said.

Global producer inflation is expected to continue to pick up as lockdown restrictions are relaxed, said Mhango.

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