Ex-Factory Prices Up to 12.27 Percent

Masahudu Ankiilu Kumateh

Statistics released by the Ghana Statistical Service (GSS) showed that Ghana’s annual percentage change in the Producer Price Index (PPI), (that is percentage change for all industry, between February 2008 and February 2009), which measures inflation in prices of goods at ex-factory recorded 12.27% in February 2009 as against 11.19% in January, 2009.

This means that ex-factory prices for all industry, which includes manufacturing, mining and quarrying and utilities sub-sectors were on average 12.27% higher in February 2009 than they were in February, last year.

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This represents an increase of 1.08 percentage points in inflation over that of January, this year.

Instructively, all industry PPI for February 2009 recorded 155.76, while PPI for the three major sub-sectors namely mining and quarrying, manufacturing and utilities made 254.58, 137.72 and 158.80 respectively.

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 reports the price indices with reference to September 2006, as the base year.

Additionally, the percentage change in the PPI for February 2009 relative to February 2008, that is, the rate of inflation for these sub-sectors notably mining and quarrying, 37.48%; manufacturing, 10.39%; and utilities, 1.49%.

Furthermore, the rate of producer price inflation in February 2009 compared with February 2008 for mining and quarrying, manufacturing and utilities sub-sectors increased to 7.0, 0.04 and 0.23 percentage points respectively. In the manufacturing sub-sector, 13 out of 16 of the major groupings showed appreciable increases of at least 10%, in their index level, ranging from 10.07 for manufacture of fabricated metal products, except machinery and equipment to 103.47% for manufacture of machinery and equipment n.e.c.

Also, the monthly change in the all industry PPI for February 2009 (that is, the percentage change in the PPI between January 2009 and February 2009), was 3.15%. Whilst, the corresponding changes for the major sub-sectors such as mining and quarrying, manufacturing and utilities contributed 13.62%, 1.53% and 0.25% respectively.

It was observed that the rise in the index for mining and quarrying is strongly associated with the increase in the prices of metal ores which represent 95% of the output of the sub-sector. Three out of 11 subgroups that contributed at least 4% each to the total manufacturing output have increases of at least 1% in their index level.

These subgroups are: production, processing and preservation of meat, fish, fruit, vegetable, oils and fats; and manufacture of non-metallic mineral products.

However, experts say if these trends continue it may have upward effect in the upcoming month inflation.

Mr. Ebo Duncan, the Head of Economics Statistics at the Ghana Statistical Service told some Economic and Financial Journalists in Accra that the year-on-year inflation from the producer’s perspective for industry and manufacturing had been rising steadily, until October 2008 when it nose-dived.

He noted that within the same period, inflation in the mining industry remained unstable, recording three-month cyclical fluctuations, until July 2008 when it consistently continued to fall till November, last year.