Producer inflation surges to 16.3%

Mining and quarrying prices continue to drive year-on-year producer inflation, causing it rise to 16.3% in March from 16.1% in February, latest official figures have shown. “Based on the revised figures for February 2012, the year-on-year producer inflation rate for March 2012 was 0.2 percentage points higher than that of February 2012. “The mining and quarrying sub-sector recorded the highest year-on-year producer inflation rate of 31.5%, followed by manufacturing with 15.6% and utilities registering the lowest rate of 9.5%,” said acting Government Statistician, Dr. Philomena Nyarko, at a media briefing in Accra. Dr. Nyarko explained that the producer inflation rate in the mining and quarrying sub-sector dropped by 7.8 percentage points to 31.5 % relative to the rate recorded in February 2012 (39.3%), mainly on account of a decrease in gold prices on the world market. The rate for manufacturing in March 2012 was slightly higher than that for February 2012 by 1.4 percentage points. Dr. Nyarko said the slight increase in the manufacturing sector could be attributed to the depreciation of the cedi to the dollar, which increased the cost of imported inputs in the production process. The rate for utilities was virtually unchanged from the previous month. During the 12-month period between March 2011 and March 2012, the producer inflation rate decreased gradually between April 2011 and June 2011. Subsequently, the rate increased consistently till it peaked in September 2011 (19.6%) and then declined marginally in October (16.4%). From the beginning of 2012, the producer inflation rate has increased steadily over the three month-period to record a rate of 16.3% in March. Manufacturing sector During the month of March 2012, six out of the 16 major groups in the manufacturing sector recorded inflation rates higher than the sector average of 15.6%. Manufacture of machinery and equipment recorded the highest information rate of 38.1%, while tanning and dressing of leather, manufacture of luggage, handbags, saddles, harness and footwear recorded the lowest rate of -1.4%. Petroleum Price Index In the last two years, producer inflation in the petroleum industry subgroup recorded three major significant changes -- in April 2010, June 2010, and January 2011. Prices in the petroleum industry increased in January 2011, resulting in a sharp rise in inflation for this subgroup to 23.4 %. It then remained stable until December 2011. In March 2012, this group had a slight increase of 0.3 percentage points over February 2012 (19.7 %) to record a producer inflation rate of 20%.