September showed price pressures in the primary sectors
18.10.2016Company: Amcham
September’s industrial prices recorded an increase and thus erased their August decline. Agricultural prices bounced a strong 4.2%. If the price increase in the sector survives, it would mean an increase in food prices in terms of the consumer basket. This would increase pressure on the FX commitment and elevate the need of the CNB to intervene. Service prices increased as well, but mostly due to seasonality.
Industrial prices increased 0.3% mom in September. The yoy decline narrowed from 3.4% in August to 2.4% in September due to a statistical base effect. According to the CZSO, the prices increased mostly due to coke and refined petroleum products. The dynamics reflect trends on global oil markets. Oil prices halted their growth in June after British citizens voted to leave the EU. The revival of their growth occurred on the verge of September and October after the OPCE cartel reached a preliminary deal on drilling cut. The oil price thus bounced above USD 50 per barrel. We can thus expect another increase in producer prices driven by oil. Prices in the food industry increased as well, following the swing in agricultural prices.
Agricultural prices bounced a strong 4.2% mom in September after they printed a decline in the preceding two months. After adjusting for seasonality, producer prices have increased four months in a row. It thus seems that the declining trend of agricultural prices has been broken. The yoy decline has shrunk from 6.9% to 3.4%.
Construction work became slightly more expensive despite the muted activity in the sector. Service prices pointed to strong mom growth. However, most of this was due to seasonal effects.
Tags: Economics | Finance |
