Producer inflation up 10.5%

28 October 2011 - 02:24

By I-Net Bridge

South Africa's Producer Price Index registered growth of 10.5% year-on-year in September from 9.6% y/y in August, Statistics South Africa data released show.

The PPI came in at -3.3% on a monthly basis from 1.0% in August.

Nedbank economist Carmen Altenkirch said: "Producer inflation edged up further in September, rising above 10% for the first time since December 2008. Year-on-year increases in commodity prices and beneficiated metal products remain the main drivers of producer inflation.

"Over the month prices fell, largely due to the decline in electricity prices back to the summer tariff level. Producer inflation is expected to edge up over the coming months.

"Deteriorating economic prospects will make businesses reluctant to invest in additional capacity. This should contain price increases of manufactured goods as well as machinery."