Consumers To Spend More

Even though Producer Price Index (PPI) fell to 18 percent year-on-year for July 2012 from 19.1 percent in June, consumers will still have to spend more, acting Government Statistician, Philomena Nyarko, has said.

Presenting the latest newsletter yesterday in Accra, Dr Nyarko indicated that the latest survey only depicted a slack in the pace at which factory prices were rising.

“Prices are rising alright but the pace is slower. It is just the rate that has gone down but not the actual price, so consumers will still spend more.”

The producer price index measures the average change over time in the prices received by domestic producers for the production of their goods and services. The base year is 2006.

Noting that the month-on-month change in the producer prices recorded 0.7 percent following a rate of 2.5 percent in June 2012, Dr Nyarko said the survey covered industry and some three major sub-sectors, namely mining & quarrying, manufacturing and utilities.

Mining and quarrying recorded the highest year-on-year producer inflation of 20.3 percent, followed by manufacturing. Manufacturing, which constitutes more than two-thirds of total industry, decreased to 20 percent, from a rate of 21.9 percent in June 2012.

The utilities sector increased by 0.5 percentage points from the June 2012 rate of 10.1 percent to 10.6 percent in July 2012.

From January 2012 to May 2012, producer inflation fluctuated between 15 percent and 16.6 percent.

Five out of the 16 major groups in the manufacturing sector recorded inflation rates higher than the sector average of 20 percent.

Manufacture of textile recorded the highest inflation rate of 57.1 percent while manufacture of machinery and equipment recorded -7 percent.

“Over the last 12 months, producer inflation in the petroleum industry sub-group has been exhibiting a downward trend from 27.4 percent in July 2011 to 16.8 percent in July 2012,” Dr Nyarko said.