Producer price index, 15 January 2000

The first month of the year was characterized by many price adjustments not an unusual phenomenon in January. There has been an increase in most of the groups, while no group has had a decrease. The group oil extraction, mining and quarrying showed only a minor increase of 0.3 per cent this time an increase totally attributable to rising prices in metal ore mining. Oil extraction, mining and quarrying experienced an increase of roughly 2.5 per cent the same period last year, contributing to a decrease in the 12-month rate from 51.7 to 48.5 per cent.

Manufacturing

Manufacturing prices are still rising, this month by 0.7 per cent. This is the highest monthly rate observed since January 1995. The 12-month rate thereby went up from 3.3 to 3.9 per cent. The group manufacture of chemicals and chemical petroleum, coal, rubber and plastic products increased by 2.4 per cent. Other groups showing considerable increases are manufacture of paper and paper products, printing and publishing (0.9 per cent), and manufacture of basic metals (0.8 per cent). In the former group changing prices of books and magazines contributed the most, but also paper and paper products showed increasing prices. Changes in the export market however, pulled in the opposite direction. Here, the prices of some paper products were falling.

The development in the group manufacture of food, beverages and tobacco is also worth noticing: There has been no change from December to January this group is also the only one with a negative 12-month rate (-0.5 per cent). The two preceding years the index had been rising, while 1999 saw a fall.

The development of the PPI

A retrospect of the PPI development the last three years shows that the index increased strongly last year especially the last half year. We also see that this increase continued in year 2000. This can to a great extent be explained by increasing oil prices, but we see that a similar illustration of the development in manufacturing gives the same picture. Also here some of the increase is due to the rising oil price, causing the prices of refined oil products to increase.