By the end of April 2023, producer prices of industrial products on the domestic market grew by 9.2% YoY and decreased by 1.8% MoM.
The latest producer prices of industrial products (PPI) overview has yesterday been published by the Croatian Bureau of Statistics, DZS. In the report, we can see that the producer prices of industrial products increased by 9.2% YoY, and decreased by 1.8% MoM in April 2023. Meanwhile, producer prices excl. Energy decreased by 0.1% MoM, and increased by 7.7% YoY, showing us that other input costs besides energy, such as prices of material/commodities and other goods required for production have also increased. This would also indicate that even though the initial surge in PPI was driven by higher energy costs, as the prices of energy have somewhat stabilized in the last couple of months, the higher prices have spilled over to other segments of the industry.
Breaking the PPI by categories, on a YoY basis, the producer prices in the Energy category grew by 12.4%, in Durable consumer goods by 11.6%, in Non-durable consumer goods by 11.1%, in Intermediate goods by 4.2%, while in Capital goods they grew by 3.7%.
The only category to note an MoM increase is Non-durable consumer goods with only a 0.4% increase. Further, Durable consumer goods remained flat, while all other categories noted an MoM decrease. Energy noted a 0.7% decrease, followed by Intermediate goods and Capital goods, decreasing 0.6% and 0.5%, respectively.
Producer prices of industrial products (June 2016 – April 2023, YoY %)
Source: DZS, InterCapital Research
Next up, we have the breakdown of the producer prices of industrial products by sector. On a YoY basis, the largest growth was recorded in prices in Electricity, gas, steam and air conditioning supply, which increased by 30.8%, followed by Manufacturing at 5.2%, and Water supply; sewerage, waste management and remediation activities, by 1.3%. On the other hand, Mining and quarrying recorded a decrease in prices of 27.5%.
At the same time, on an MoM basis, producer prices in all categories noted either flat or lower price development.
Mining and quarrying remained flat, while Electricity, gas, steam and air conditioning supply noted the biggest decrease of 8.2%, which should not surprise due to a high base. Manufacturing decreased by 0.4% MoM, while Water supply remained relatively flat with a 0.1% MoM decrease.
The trend from the previous year in the PPI growth spilled over to the CPI with a time delay. Currently, we are witnessing lower pressures on PPI with MoM decline in price, which we hope will spill over to CPI and finally result in MoM price decreases, not only illusory lower growth on a yearly basis.