Johannesburg, 26 September 2019 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes the rebound in the Producer Price Index (PPI) for intermediate manufactured goods in August, as indicated in data released by Statistics South Africa (Stats SA) today.
The data indicate that the annual percentage change in the PPI for intermediate manufactured goods, a measure of factory gate prices, rebounded to 1.9 percent in August 2019 from 1.7 percent in July 2019. Alternatively, the PPI for final manufactured goods for the broader manufacturing sector registered an annual slowdown, dipping from 4.9 percent in July 2019 to 4.5 percent in August 2019.
SEIFSA Economist Marique Kruger said domestic producers still operate under difficult business conditions, as evidenced by the weak exchange rate and increasing energy and fuel prices. These factors invariably contributed to the rebound in selling price inflation in the M&E cluster as producers pass on cost increases, and are expected to continue to influence the trend in the short to medium term.
“Hopefully, the rebound in the PPI for intermediate manufactured goods will provide a buffer for businesses, as it is imperative to maintain a positive differential between selling price and input cost inflation in order to ensure that businesses maintain healthy margins,” Ms Kruger said.