News

Agricultural prices stopped their freefall while prices in industry continue growing

Agricultural prices stopped their freefall that they began in the first month of the year. Yet, in the yoy comparison, they remain significantly lower. Also, industrial producer prices reported growth figures in June following the upswing in the oil prices. Compared to last year, they still remain 4.4% lower. Construction prices also moved up, and so the only primary sector with declining prices were services. Thus, the impact of today’s figures on consumer prices will be positive, but insignificant. Moreover, the results of the Brexit referendum halted the rise of oil prices and thus muted further inflationary pressures.

Industrial producer prices have confirmed their bottoming out as they increased 0.3% mom. In June, oil prices supported their growth when oil reached its high since October. In July, the oil price advance did not continue and it will not help to increase industrial prices further for a while. The prices increased in other sectors as well, as the global commodity price increase was apparent. The overall dynamics was impeded by the food industry despite reported growth in agricultural prices. 

Agricultural prices stopped their decline, which started at the beginning of the year, and added 1% mom. In the yoy comparison they narrowed their decline from 7.1% to 6.4%. In June, we recorded an increase in prices of crop production, ‘pigs for slaughter’, and poultry. On the other hand, the drop in milk prices continued (it started in spring 2014 and except for a small pause, it has continued since) and eggs. The yoy decline is due to both livestock (-10.7%) and crop (-2.6%) production prices. The preliminary harvest estimates point to an average result after last year’s exceptional outcome.

Thus, we expect at least a stabilization of the crop prices after last year’s sharp drop.  

Service prices decreased 0.3% mom in June. Their drop is mainly due to decline in advertisement prices, which cut 3% mom. After adjustment for this volatile item, the service prices decreased only 0.1%.  In the yoy terms, market services added 0.3% as they were mostly impeded by a slump in transport prices due to lower oil prices yoy. We also see lower prices in the financial sector. In contrast, most other segments report a continuous price growth. 

Construction work prices increased 0.2% mom while the construction material prices followed the developments of commodities on the global markets and increased 0.3% mom. The yoy growth of construction work slightly accelerates to 1.1% from 1% in May. The construction materials are 1.9% lower compared to last year.