SA Producer Price Index (PPI) remains at 5.2% in November

South Africa’s Producer Price Inflation (PPI) remained unchanged in November at 5.2% year-on-year, Statistics South Africa (Stats SA) said on Thursday.

“PPI for domestic output shows an annual rate of change of 5.2% in November 2012. This rate is the same as the corresponding annual rate of 5.2% in October 2012,” said Stats SA.
 
The November number was slightly better than what was expected.
 
Consensus was that PPI would come in at 5.4%.
 
From October 2012 to November 2012 the PPI - which is the price of goods leaving factories and mines - increased by 0.3%.
 
Agriculture, mining and quarrying, products of petroleum and coal as well as the basic metals categories each contributed 0.1 percentage points to the monthly increase. However, electricity decreased by 0.1 percentage points.
 
PPI is expected to remain at current levels or marginally higher in the coming months. However, the danger in the short term was food prices following on the dry summer in the US.
 
“The weaker rand also poses a risk in early 2013. The latest producer inflation number does not change our baseline interest rate view. We believe that given rising inflationary pressures and a weak economy, the Reserve Bank is likely to keep rates unchanged until November 2013, provided that the economy does not slip into recession, in which case further monetary easing cannot be ruled out,”  said Nedbank economists.