Factory prices in Ghana drop
The annual percentage change in the Producer Price Index (PPI), which is the percentage change for all industry, between November 2007 and November 2008, which measures inflation in prices of goods at production level, recorded 19.35% for November this year.
This implies that ex-factory prices for all industry, which includes manufacturing, mining and quarrying and utilities sub-sectors, contributed averagely 19.35% higher in November 2008 than in November, last year. This represents a drop of 16.74 percentage points in inflation over that of October 2008, which was 36.09 percentage points.
Instructively, the PPI measures the average change over time in the prices received by domestic producers for the production of their goods and services. The PPI also reports the price indices with reference to September 2006, as the base year.
It shows the monthly index level, as well as the annual and monthly percentage changes in the index level, for all industry (total industry) and the three major sub-sectors covered, namely -mining and quarrying, manufacturing and utilities (electricity, gas and water).
Speaking to journalists in Accra at the monthly release of the PPI, the Director of Trade and Industry of the Ghana Statistical Services (GSS), Mrs. Araba Forson disclosed that year-on-year inflation from the producer’s perspective for all industry and manufacturing was rising steadily, until October 2008 when it nose-dived.
However, within the same period, inflation in the mining industry remained unstable, recording three cyclical fluctuations, until July 2008 when it consistently continued to fall.
During the month of November 2008, inflation in the manufacturing sub-sector for the first time recorded (25.63%) the highest inflation, with utilities recording (2.99%) the lowest.
Importantly, mining and quarrying contributed 191.59; manufacturing, 147.50; and utilities, 157.89 as November 2008 PPI. The percentage change in the PPI for November 2008 relative to November 2007, that is the rate of inflation for mining and quarrying, manufacturing and utilities were 18.54%, 25% and 2.99% respectively.
The rate of producer price inflation in November 2008 compared to October 2008 for mining and quarrying, manufacturing and utilities dropped by 22.85, 7.72 and 42.02 percentage points respectively. In the manufacturing sub-sector, 14 out of 16 of the major groupings showed appreciable increases of at least 10%, in their index level, ranging from 12.85% (manufacture of paper and its products) to 103.60% (manufacture of machinery and equipment n.e.c).
On the other hand, the monthly change in the all industry PPI for November 2008, that is the percentage change in the PPI between October 2008 and November 2008 was -1.77%. While the corresponding changes for the major sub-sectors were: mining and quarrying, -2.85%; manufacturing, -2.61% and utilities, 0.10%.
Source: The Chronicle