Producer Price Inflation Down 1.2%

The output price index for home sales of manufactured products was down 1.2% in the year to June according to the ONS Producer Price Index bulletin. The ‘factory gate’ index reflects a fall in chemical prices of 3.0% between May and June partly offset by increases in petroleum products of 3.9%. Leaving out ‘volatile’ sectors, like food, beverages, tobacco and petroleum, the ‘narrow’ index increased 0.1%. Petroleum products actually fell by 19.9% over the year. Input prices for materials and fuels bought by the manufacturing industry fell 11.0% in the year to June but rose 1.5% in the month from May to June. The ‘narrow’ index fell 2.6%. The rise in the input index reflects mainly the change in the price of crude oil rising by 14.3% in May but falling by 36.8% over the year to June. The price of imports fell 0.3% between May and June.