China's producer prices rise 3.8 per cent in August
Producer prices in China rose 3.8 per cent over the year and 0.4 per cent over the month in August. Increases of 26.6 per cent in coal mining and 20.8 per cent in non-ferrous metal processing show cost pressure concentrated near the start of the production chain. Falling consumer-goods prices indicate that the increase has not reached every factory-gate product equally.
Economics & Markets··Midday
Acceleration at the factory gate
China's National Bureau of Statistics said the producer price index rose 3.8 per cent from a year earlier and 0.4 per cent from July in August. The index tracking producers' input purchases increased 5.8 per cent over the year and 0.3 per cent over the month. South China Morning Post corroborated the release and reported that annual producer-price growth accelerated from 3.5 per cent in July. The shared core across the two publishers is renewed pressure at the factory gate; the official bulletin supplies the detailed sector breakdown.[1], [2]
Pressure concentrates in raw materials
The annual increase was uneven across industries. Prices rose 26.6 per cent in coal mining, 20.8 per cent in non-ferrous metal smelting and processing, and 10.5 per cent in oil and natural-gas extraction. Production materials added about 3.92 percentage points to the annual movement in the overall index. The pattern shows that energy and metals near the start of the production chain, rather than a broad rise in finished goods, supplied most of the upward force. Later stages of production have not yet passed through the same pressure to the same degree.[1]
Consumer goods move the other way
Producer prices for consumer goods fell 0.5 per cent over the year and subtracted about 0.10 percentage point from the overall change. Prices declined 2.3 per cent in food manufacturing, 1.2 per cent in clothing and 0.8 per cent in daily-use goods, while durable consumer goods rose 1.2 per cent. The coexistence of sharply dearer raw materials and cheaper goods closer to households shows that companies' input conditions are not passing into selling prices at one uniform speed. The next monthly releases will show whether the consumer-goods line remains below zero.[1]
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