Mining & Quarrying and Manufacturing Indices Increase Once More, But Why?

  • For August 2023, output prices for producers in the Mining and Quarrying industry increased negligibly while prices in the Manufacturing industry increased by 1.9% as reported by the Statistical Institute of Jamaica (STATIN).
  • The negligible movement in the Mining and Quarrying industry was attributed to the stability of the exchange rate during the period. The index for the major groups ‘Bauxite Mining & Alumina Processing’ and ‘Other Mining & Quarrying’ each registered negligible changes in their respective indices.
  • An increase of 10.8% in the index for the major group ‘Refined Petroleum Products’, due mainly to increased fuel prices on the international market, was the main contributor to the 1.9% increase in the Manufacturing industry. The index for the heaviest weighted major group within the industry, ‘Food, Beverages & Tobacco’, had a negligible change. This was largely due to a combination of factors, including a stable Jamaican dollar relative to the United States dollar and the relatively stable prices for inputs used by manufacturers.
  • For the period August 2022 - August 2023, the index for the Mining and quarrying industry increased by 6.3%. This was a result of a similar 6.3% rise in the index for the major group 'Bauxite & Alumina Processing’. For the same period, the index for the Manufacturing industry increased by 0.4%. This was mainly due to an increase of 2.6% in the index for the major group ‘Food, Beverages & Tobacco’. The industry’s increase was tempered by a 9.0% decline in the index for ‘Refined Petroleum Products’.
  • The Producer Price Index (PPI) is a significant economic indicator that tracks the average fluctuation in selling prices that domestic producers of goods and services experience over time. While there was a minor dip in the PPI in June, the PPI for August inched up marginally for both manufacturing and mining & quarrying. The decision by OPEC+ to curtail oil supply is a likely explanation for the increase and could cause a further escalation in producer prices given that reduced oil supply has the potential to drive up costs in key areas in the economy.

(Sources: STATIN & NCBCM Research)