The headline producer price index (PPI) for final manufactured goods fell to 1.2 percent year-on-year in April, to record lows, down from 3.3 percent in March as the the lockdown hit activity.
Retail activity was only limited to food and non-alcoholic beverages, and health items which were deemed essential during the hard lockdown, bringing manufacturing activity to a halt.
Manufacturing activity fell to record lows in April and weakened business confidence given the lockdown measures taken as a result of the coronavirus pandemic.
Statistics South Africa (StatsSA) said yesterday that the PPI decreased by 0.7 percent month-on-month in April.
The main contributor to the headline PPI monthly decrease was coke, petroleum, chemical, rubber and plastic products, which decreased by 3.9 percent month-on-month.
“The restrictions on economic activity imposed by the government in April have adversely affected the extent of imputations used to compile the PPI,” StatsSA said.
Investec’s Lara Hodes said falling fuel prices continued to have a dampening effect on the PPI.
Hodes said fuel price dynamics were captured in the coke, petroleum, chemical, rubber and plastic products category, which holds the second largest weighting in the PPI basket at 19.38 percent.
“Indeed, the international oil price was 60 percent weaker in March and April compared to the start of the year, amid a marked slowdown in global growth, caused by the Covid-19 pandemic,” Hodes said.
“Downward pressure on the oil price, which outweighed the effects of the currency depreciation led to petrol and diesel price drops of 188 cents per litre and 133.7 cents per litre in April respectively.”
On an annual basis, StatsSA said the main contributors to the print were food products, beverages and tobacco products; and transport equipment.
Food products, beverages and tobacco products increased by 3 percent year-on-year, transport equipment increased by 9.2 percent year-on-year.
For intermediate manufactured goods, StatsSA said the annual percentage change in the PPI was 1.3 percent in April compared with zero percent in March.
The main contributor to the annual rate was basic and fabricated metals while the main contributors to the monthly rate were basic and fabricated metals and chemicals, rubber and plastic products.