PPI Components Deliver Mixed Results

  • Jamaica’s Monthly and Point-to-Point Producer Price Index (PPI) results were mixed for October 2024 across the Mining & Quarrying and Manufacturing industries according to data from STATIN.
  • The monthly output prices for producers in the ‘Mining & Quarrying’ industry declined by 21.1% in October 2024, while prices in the Manufacturing industry increased by 0.2%.
  • The downward monthly movement in the ‘Mining & Quarrying’ industry was led by a 21.7% decline in the index for the major group ‘Bauxite Mining & Alumina Processing’, marginally offset by the index for ‘Other Mining & Quarrying’ that inched up 0.1%.
  • On the other hand, the marginal increase in output prices in the manufacturing industry was driven by slight increases in the prices for ‘Food, Beverages, and Tobacco’ and the Refined Petroleum groups. ‘Food, Beverages, and Tobacco’ grew 0.2%, driven by higher prices in the subcategories ‘Manufacture of Beverages and Tobacco’ (0.5%) and ‘Manufacture of Other Food Products’ (0.1%). Meanwhile, ‘Refined Petroleum Products’ grew 0.6%, resulting from higher crude oil prices on the international market.
  • However, on a point-to-point basis (October 2023 – October 2024), the tables turned, with the ‘Mining and Quarrying Index’ increasing (+9.2%) and the Manufacturing Index declining (-0.3%).
  • ‘Mining and Quarrying’ price increases were led by a 9.2% increase in the prices associated with Bauxite Mining & Alumina Processing. Meanwhile, prices in the Manufacturing Industry were influenced by a 12.4% decline in the prices of Refined Petroleum Products, albeit moderated by a 3.1% increase in Food, Beverages & Tobacco prices.
  • 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 the Manufacturing Industry and ‘Mining & Quarrying’.
  • S. President-elect Donald Trump has asserted that once he takes office in January, tariffs may be imposed on Canada, Mexico, and China. Trump’s proposed tariffs could ignite a trade war1, driving up the cost of goods and services to the U.S. and its trade partners. Since the U.S. is Jamaica’s primary trading partner and a key source of imported inputs, Jamaican producers could face increased input costs. This, in turn, may lead to further rises in the Manufacturing Index.

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1A trade war is a situation in which countries try to damage each other's trade, typically by the imposition of tariffs or quota restrictions.

Source: (STATIN & NCBCM Research)