Producer price indices - 1. quarter of 2004

Prices of industrial producers grew by 0.8% in January, 0.3% in February and 0.8% in March (all month-on-month). A number of significant prices changes occurred in the first quarter of this year. January saw prices of electricity, gas and water by 3.1% up of which electricity (incl. distribution) accounted for +3.6%, water +4.1% and heat +1.7%. A considerable rise in prices was also established for manufacture of basic metals and fabricated metal products where prices went up especially in March (+2.9%). The highest rise in prices in general was recorded for products of manufacturing n.e.c.: +5.7% month-on-month in March (growing prices of secondary raw materials). An upward trend over the reference quarter was observed for coke and refined petroleum products prices (3.6%). Prices of chemicals, chemical products and man-made fibres then followed suit (+2.1% in February). Prices also increased in other industries, but their growth rate was slower (not more than 0.6% in March).

Compared year-on-year, prices of industrial producers increased by 1.7% over the first quarter of 2004 of which March saw the highest rise (+2.1%). Prices of food products, beverages and tobacco rose by 4.7% on average. Prices of bread and mill and starch products increased in particular (+14.4% and 8.2%, respectively) as a result of a large rise in the price of bread wheat after the new harvest: the wheat sold at CZK 4 330 per tonne in February 2004 as against to CZK 3 166 per tonne in February 2003. Prices of industrial feedingstuffs also grew considerably in the first quarter (+11.3%), in response to price rises in fodder wheat (+43.4% in February year-on-year), fodder maize and fodder oats. Prices of meat and meat products were higher by 3.0% and prices of dairy products by 4.9% on first quarter 2004 average.

The gradual growth of prices of basic metals and fabricated metal products, whose year-on- year increase reached 5.6% in March and 3.7% in the first quarter on average, was significant. The growth was slowed down by the trade contracts concluded that prevented the price growth of input materials to be reflected in a number of products. Globally, interest in metals grew considerably; it was awakened by higher demand from Asia and especially from China, say experts. Prices of metals in world markets are shooting up, which holds not only for steel and secondary raw materials, but also other metals such as copper, aluminium, tin, zinc, and lead. For instance, Grade A copper which was selling in world markets at USD 1,683.44 per tonne (London Exchange) in February 2003 increased in its price up to USD 2,758.96 per tonne in February 2004. February 2004 prices of lead (99.97%) were USD 893.01 per tonne, having risen from USD 475.40 paid per tonne at the London Exchange in February 2003.

Prices of metal secondary raw materials were increasing at the same time. Their March rise stood at 39% on average year-on-year, which affected prices of products of manufacturing n.e.c by 7.6%.

In the area of energy, prices of electricity (incl. distribution) and heat were up by 3.2% and 1.3%, respectively. Coke and refinery products prices were still 6.8% below their first quarter 2003 level (they reacted to year-on-year decreases in import prices of mineral fuels and mineral oils).

Compared with the EU year-on-year, prices of industrial producers were under the EU-15 average for the most part of 2003. In October, the prices in the CR began converging on the year-on-year level of EU-15 prices, and in January and February 2004, they grew faster than in the EU-15.

Growth of construction work prices has been without fluctuation for a long time. In the reference quarter, the prices increased by 2.4% year-on-year , while those of construction material inputs went up by 1.8%.

Prices of market services were rising rather steadily month-on-month: +1.0% in January, +1.4% in February and +0.8% in March.

Year-on-year, prices of market services speeded up their growth to 2.1% in the first quarter of 2004, with those of real estate; renting and business activities (+2.9%) affecting the total price level most. In this area, it was the prices of advertising and computer and related services that increased in particular (+8.5% and 3.4%, respectively). Prices of financial intermediation; except insurance and pension funds increased by 1.6% year-on-year, particularly due to the growth of monetary intermediation prices (+3.9%); leasing prices fell by 1.9%. While first quarter insurance prices rose by 1.6%, their development was different depending on the type of insurance: prices of insurance of property against damage caused by fire grew by 7.5% and of motor car insurance by 1.2%, but prices of insurance against theft dropped by 4.5%. Post and telecommunication prices decreased by 0.1% in total. Prices in national goods transport increased by 1.3% and were affected by a 4.5% increase in prices of road goods transport. Prices of goods transport via railways stagnated.