5% Increase In Factory Gate Prices

Output prices for home sales of manufactured products increased by 5% in year to March, from 4.2% last month and 0.9% between February and March. The increase mainly reflects the 24.8% increase in output price for petroleum products over the year. It is the highest increase since September 2008. Electrical and optical increased by 6.3% and chemicals by 4.5%. Excise duties did not contribute that much to the increase. The output price index excluding volatile priced products like food, beverages, tobacco and petroleum increased by 3.6% in the year and 0.7% in the month to March. The output price of petroleum products increased 3.9% over the month. The index for paper products is the lowest it has been since January 2006.

Input prices for materials and fuel for the manufacturing industries increased by 10.1% in the year and 3.6% in the month to March. The increases mainly reflect the 60% increase in price for crude oil and 14.4% increase in price for imported metals over the year. Imported materials as a whole increased 4.4% between February and March. If the more volatile categories are excluded the index increased 4% over the year and 1.1% in the month between February and March. The price of crude oil increased 9.7% in the month between February and March and imported metals 5.3%. It is the largest monthly rise since records began in February 1991.

The producer price index is important because because it provides a key inflation measure as important as the CPI or the RPI and works on a similar 'basket of goods' principle. The current data is from the statistical release from the Office for National Statistics for March 2010.

Factory Gate Prices Increase Again

Output prices rose overall by 3.8% in the year to January, compared with a 3.5% rise in the year to December. The index rose 0.4% between December and January mainly due to price rises in petrol products, tobacco and alcohol products and other manufactured products. Input prices for materials and fuels rose 8.4% in the year to January compared with 7.4% in the year to December and 2% between December 2009 and January 2010 compared with 0.6% between November and December 2009.

Over the year to January output prices increased in all catogories except textiles and clothing which decreased by o.2% The biggest increase was in petroleum products with 20.6%. Electrical and optical went up 4.3%, tobacco and alcohol by 3.7% and both transport and other products by 3.3%. The changes over the month to January saw decreases in the output prices of food at 0.1%, textiles and clothing at 1.2% and metal products at 0.1%. Petroleum products went up by 1.7% which was the biggest increase over the month.

Input prices were generally up with a 70.6% rise in the price of crude oil. Impiorted metals went up by 7.1%. A number of categories prices went down in January including fuel at 16.1%. Imported food materials prices decreased by 2.8%, home food materials prices decreased by 5.7% and other home produced materials by 0.7%. Over the month the price of crude oil increased by 5.3% and fuel by 3.1%. Home food products materials prices increased by 0.4% and imported food materials products by 0.3%.

Producer Prices Increase 0.4%

Output prices of manufactured products increased by 0.4% in the year to September compared to August when they fell by 0.3%. Prices increased over the month between August and September by 0.5%. The changes reflect increases in the prices of petroleum products of 2% and changes in duty on petroleum products which is estimated to have added 0.2% to the output index. Unleaded petrol is reported to have increased by 2.6% between August and September but decreased by 3.1% over the last year. Prices excluding excise duties fell by 0.6% over the year and increased by 0.4% on the month and excluding food, beverages, tobacco and petroleum increased by 1.4% over the year and 0.5% over the month.

Input prices for materials and fuels fell by 6.5% over the year to September and fell 0.5% over the month. It compares with a fall of 7.7% in the year to August. The manufacturing index fell 0.5% between August and September compared with 1.7% for the same time last year. The fall reflects the fall of 4.4% in the price of crude oil for the month and 24.1% over the year. Imported materials increased by 1% over the month to September offsetting the fall. The index excluding food, beverages, tobacco and petroleum fell by 1.7%.

Retail Beginning To Stabilise

The latest CBI distributive trades’ monthly survey, for September, suggests that retail conditions are beginning to stabilise. Sales are basically unchanged on the year to September and expected to remain so in October. A slight majority of retailer respondents to the survey reported sales volumes had risen over the year.

The results are better than expected following months of falling sales. Volumes of orders fell slightly but the three month moving average fall is slowing down. Retailers are keeping stocks low but are more than adequate to meet demand.

The sectors contributing to the overall figures include grocers, footwear and leather goods reporting good year-on-year results. All other sectors are falling, but the pace is slowing for clothing and furniture and carpets. Wholesale is ‘flat’ but are expected to fall next month. Food and drink, clothing, footwear and textiles reported the strongest growth. The hardest hit were industrial materials, builders’ merchants and electrical installation materials. Motor traders sale volumes were more or less unchanged in due partly to the scrappage scheme. They had been expected to grow in the year to September and are expected to fall next month.