Further Increases In the PPI Indices; But What Are The Drivers?  

  • There was a 0.1% increase in output prices for producers in the Mining and Quarrying industry for September 2023, while prices in the Manufacturing industry went up by 1.2%.
  • The increase in the Mining and Quarrying industry was mainly a result of the depreciation of the Jamaican dollar against its United States counterpart. The index for the other major group ‘Bauxite Mining & Alumina Processing’, also increased by 0.1%.
  • The main contributor to the 1.2% increase in the Manufacturing industry was a 5.9% increase in the index for the major group ‘Refined Petroleum Products’, due mainly to higher fuel prices on the international market. The index for the heaviest-weighted major group within the industry, ‘Food, Beverages & Tobacco’, had a negligible increase. The group ‘Production, Processing & Preserving of Meats, Fish, Vegetables, Oils and Fats’ increased by 0.1% as a result of a 0.2% rise in the sub-group ‘Meat & Meat Products and Fish & Fish Products’. This was due to higher costs of production for processed meat during the review period
  • For the period September 2022 – September 2023, the index for the Mining and quarrying industry increased by 6.5%. This was a result of a 6.6% rise in the index for the major group ‘Bauxite Mining & Alumina Processing’. The point-to-point index for the Manufacturing industry rose by 1.9%, due primarily to an increase of 2.7% in the index for the major group ‘Food, Beverages & Tobacco’. However, these movements were tempered by a 4.3% decline in the index for ‘Fabricated Metal Products excl Machinery & Equipment’.
  • 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. There was a minor dip in the PPI in June, however, the decision by OPEC+ to curtail oil supply could potentially further escalate producer prices. This is because a reduction in oil supply could drive up costs related to transportation and electricity.

(Source: STATIN)