PPI continues downward trend

Thursday, November 26, 2009

Pretoria - South Africa's Producer Price Inflation (PPI) registered a deflation of -3.3 percent year-on-year in October, said Statistics South Africa (Stats SA) on Thursday.

"The PPI for domestic output shows an annual rate of change of -3.3 percent in October 2009," said Stats SA.

According to Stats SA, this rate is 0.4 of a percentage point higher than the corresponding annual rate of -3.7 percent in September 2009.

From September to October 2009 the PPI for domestic output decreased by 0.1 percent. The monthly decrease was mainly due to the price indices for electricity, products of petroleum and coal and chemicals and chemical products.

Standard Bank economist Danealee van Dyk said: "The PPI isn't really showing new information. It shows that commodity prices and the strengthening of the rand are keeping goods at producer gates in deflationary territory.

"We are likely to see the sluggish trend moving forward into the new year," she said.

Market consensus was that PPI for October would come in at -3.1 percent year-on year.