PPI Components Show Mix Results in December

According to data on the Producer Price Index (PPI) released by the Statistical Institute of Jamaica (STATIN), the Mining and Quarrying Index rose by 0.3% in December, while the Manufacturing Index fell by 0.8%.
The 'Bauxite Mining & Alumina Processing' category was the main driver of the rise in the Mining and Quarrying industry index increased by 0.3%. The index for 'Other Mining & Quarrying' also increased by 0.1%. The upward movements resulted from the depreciation of the Jamaican dollar vis-à-vis the United States dollar.
In contrast, the manufacturing index fell for the third consecutive month. This was largely influenced by a decline in the index for the major group, ‘Refined Petroleum Products’ by 4.6%.
With the December 2023 performance, point to point movement in the index for the Mining & Quarrying industry, a 4.4% increase spurred by a 4.3% increase in the index for the major group ‘Bauxite Mining & Alumina Processing’.
The point-to-point increase in the index for the Manufacturing industry was more modest at 3.0%. Contributing to this increase were the major groups ‘Refined Petroleum Products’ (7.6%), ‘Food, Beverages & Tobacco’ (2.2%) and ‘Chemicals and Chemical Products’ (2.3%). However, these increases were moderated by a decline of 4.4% in the index for the major group ‘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. However, geopolitical tensions in Europe and the Middle East pose risks that could disrupt the oil supply and supply chain, which could result in higher costs for producers.
Furthermore, the drought in the Panama Canal and the tensions in the Black Sea region bring more challenges to producers through higher shipping costs as shippers resort to finding alternative routes to avoid these disruptions.

(Sources: STATIN & NCBCM Research)