Producer price indices - 2. quarter of 2005

Agricultural producer prices keep decreasing y-o-y. In the 2nd quarter of 2005, prices were lower by 14.1% (-10.8% in preceding quarter). This decrease was affected by crop product prices (-37.5%, as against -39.2% in preceding quarter), whereas animal product prices grew by 2.4% (+10.9% in preceding quarter).
The price decrease of crop products was mainly influenced by prices of cereals, which were down by 35.5% (-28.4% in preceding quarter). Prices of potatoes (-65.9%) and fruit (-19.1%, apples and currant) fell significantly too. While prices of vegetables were lower by 17.3% in the reference quarter (celery, parsley and onion), they rose by 28.2% in June (cabbage, onion and tomatoes).
The growth of animal product prices was particularly due to prices of cattle for slaughter, pigs and milk, which grew by 19.6% (particularly prices of cows and calves), 2.6% (+30.2% in preceding quarter) and 5.0%, respectively. Prices of eggs (-27.2%) and poultry (-2.9%, still +1.2% in preceding quarter) were down.



Industrial producer prices were by 4.1% higher y-o-y in the 2nd quarter of 2005, of which 2.7% in June. Characteristic for price development in the reference quarter was the considerable weakening of inflationary pressures provoked hitherto by prices of ‘basic metals and fabricated metal products’ and ‘coke and refined petroleum products’. On average, growth of prices of ‘basic metals and prefabricated metal products’ slowed down from 26.2% in preceding quarter to 11.4%.


In the 2nd quarter of 2005, price increases in ‘basic iron and steel and ferro-alloys’ decelerated to 15.9%, ‘cast-iron and steel tubes and tube fittings’ to 18.7%, and ‘other first processed iron and steel’ to 12.4%, etc. The growth of metal prices has been weakening also in world markets and the growth of import prices reduces. Whereas import prices of metal ores in October 2004 were higher by 76.3% y-o-y, their rise in April 2005 slowed down to 52.0%.

Prices of ‘coke and refined petroleum products’, which are another important factor of growth affecting the overall price level, decelerated their y-o-y rise from 31.9% in preceding quarter to 18.4% in the 2nd quarter of 2005.From among other energy sources, prices of ‘products from mining and quarrying’ (+17.9%) and prices of ‘electrical energy, gas, steam and water’ (+7.5%) were markedly higher. Prices in no other CPA section/division grew so strongly.

Prices of ‘food products and beverages’ were on the decrease in last two months. In total for the 2nd quarter of 2005, they were down by 0.4% y-o-y (quite a reverse trend than in the 2nd quarter of 2004 when an increase of 5.2% took place). Price decreases were reported for grain mill products, starches and starch products (-13.7% in June and -12.1% on average in the 2nd quarter of 2005). Price of food wheat, which fell by nearly a half (from CZK 4 592/t in May 2004 to CZK 2 665/t in May 2005), was a major influence on the development of prices of grain mill products. Also prices of ‘prepared animal feeds’ dropped sharply (-13.4%) in the 2nd quarter of 2005. On the other hand, prices of ‘meat and meat products’ were higher y-o-y (+4.6%). Also prices of beverage producers (+3.2%) and slightly prices of dairy products (+0.7%) were up.

Prices in a number of CPA divisions continued oscillating moderately. A long-term falling trend was reported for prices of transport equipment (-2.4%), electrical and optical equipment (-1.4%) and textiles and textile products (-0.8%).A comparison of the development of industrial producer prices in the CR with the EU25 shows that their y-o-y growth started to converge in the 2nd quarter of 2005. At the beginning of 2005, prices in the CR grew faster than in the EU25, but the growth in April was similar (+5.3% in the EU and +5.6% in the CR) and in May even slower (+4.5% in the EU and +4.0% in the CR). Also long-term development stands comparison with the EU25: compared to 2000 = 100, growth of prices in the CR in May 2005 was 10.7% and in the EU25 10.4% in total.


Prices of construction work were up by 2.9% in the 2nd quarter of 2005 (+4.1% in preceding quarter), prices of construction material inputs grew by 4.7% (+8.0% in preceding quarter).



The y-o-y increase in prices of market services slightly accelerated and reached 1.8% in the 2nd quarter of 2005 (+1.3% in preceding quarter). Particularly prices of real estate, renting and business activities, which grew by 2.0% (+1.6% in preceding quarter), had the decisive effect on the overall price level. Mainly prices of ‘advertising services’ (+3.1%) and ‘computer and related services’ (+5.5%) grew; on the other hand, prices of ‘real estate services’ were lower (-0.4%).
Prices of financial intermediation, except insurance and pension funding were up by 2.9% y-o-y (+4.3% in preceding quarter) due to higher prices of ‘monetary intermediation services’ (+4.9%); prices of leasing services dropped (-0.4%).
Prices of insurance services rose by 1.2% (+0.6% in preceding quarter). Prices of fire insurance grew by 3.3%, insurance against theft by 4.1% and motor car insurance by 0.6%.
Prices of post and telecommunication services in total rose by 0.2% in the 2nd quarter of 2005 in consequence of higher prices of fixed telephone services (+4.2%) and national post services (+15.6%). On the other hand, prices of mobile telephone services dropped (-10.7%).
Prices of national goods transport were up by 2.1% in the 2nd quarter of 2005. An increase of 3.2% was reported for prices of ‘freight transportation services’ by road.