Point-to-Point Increases in the PPI

• Monthly output prices for producers in the Mining & Quarrying industry increased by 0.5% for August 2024 relative to July 2024, while prices in the Manufacturing industry fell by 0.7%.
• The upward movement in the index for the Mining and Quarrying industry was attributed to a 0.5% increase in the index for the major group ‘Bauxite Mining & Alumina Processing’. The other major group, ‘Other Mining & Quarrying’, increased by 0.1%. The contributing factor to these increases was the depreciation of the Jamaican dollar relative to the United States dollar.
• On the other hand, a 4.5% decrease in the index for the major category ‘Refined Petroleum Products’—attributed to lower crude oil prices in the international market—was the primary factor behind the decline in the Manufacturing industry index. However, this overall decrease was offset by a 0.1% increase in the index for the major group ‘Food, Beverages & Tobacco.’ This increase was mainly driven by rises in the indexes for the categories ‘Manufacture of Grain Mill Products, Starches and Starch Products’ (0.1%) and ‘Manufacture of Other Food Products’ (0.2%), resulting from general price increases and higher raw material costs.
• For the period August 2023 – August 2024, the point-to-point index for the Mining & Quarrying industry increased by 7.7%, reflecting a similar increase of 7.7% in the index for the major group ‘Bauxite Mining & Alumina Processing’.
• 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 experienced over time. Currently, the only industries being tracked are Manufacturing Industry and Mining and Quarrying.
• With international oil prices being a key driver of the ‘Refined Petroleum Products’ category, geopolitical tensions could have a material impact on the Manufacturing industry index in the near-to-medium term, if it results in a material rise in oil prices.  
• The impact has been limited since the onset of the Hamas-Israel conflict last year. However, oil prices climbed about 8.3% since Tuesday after Iran fired a salvo of ballistic missiles at Israel in retaliation for Israel's campaign against Tehran's Hezbollah allies in Lebanon. This increase highlights how rapidly escalating geopolitical conflicts in the Middle East can disrupt global energy markets.

 (Source: STATIN & NCBCM Research)