Producer price indices - 4. quarter of 2004 and year 2004
Product Code: e-7032-04
Producer price indices in the 4th quarter of 2004 and in the year 2004
Producer prices in the 4th quarter of 2004
Agricultural producer prices still decelerate their y-o-y rate of growth; they were by 3.1% higher in the 4th quarter of 2004 (+6.7% in the 3rd quarter). While crop product prices fell by 4.7% (the first decrease since the 3rd quarter of 2003, the 3rd quarter of 2004 still saw an increase of 4.0%), animal product prices rose by 7.8% (+8.3% in the 3rd quarter).
The drop in crop product prices was especially affected by lower prices of cereals by 13.0% (+12.4% in the 3rd quarter). Significantly decreased prices of potatoes, which were down by 49.2% (-25.4% in the 3rd quarter), vegetables by 34.7% (-17.2% in the 3rd quarter) and fruit by 18.0% (still +4.2% in the 3rd quarter). The only commodity where a significant growth was observed was sugar beet (+61.2%).
The growth of animal product prices was mainly due to higher prices of cattle for slaughter by 16.3% (+11.1% in the 3rd quarter), pigs by 15.6% (+14.3%), milk by 5.7% (+3.9%) and poultry by 2.8% (+6.0%). Only prices of eggs recorded a fall of 19.2% (+0.8%).
In terms of year-on-year comparison, industrial producer prices grew throughout the year and in the 4th quarter on average were the highest in 2004 (by 8.2%). The growth culminated in October, with 8.6%. Increases slowed down in next two months, being 8.2% in November and 7.7% in December.
Price increases in the following CZ-CPA activities had the decisive effect on the higher price level in the 4th quarter of 2004:
- basic metals and fabricated metal products by 29.0%
- coke, refined petroleum products and nuclear fuel by 49.6%
- food products, beverages and tobacco by 3.6%
Y-o-y prices of basic metals and fabricated metal products in the 4th quarter were the highest in 2004. In last two months of the quarter, the growth slightly started to slow down. Compared with the corresponding period of 2003, prices of all product groups were higher. Prices of iron, steel and ferro-alloys were higher by 61.4% y-o-y, prices of cast-iron and steel tubes and tube fittings by 35.2%, prices of other first processed iron and steel by 42.4%. The rise in prices in this CZ-CPA activity was caused by increasing prices on world markets; import and export prices rose too. Imports of iron ores were by 76.3% more expensive in October 2004 than a year earlier. Moreover, also prices of metal secondary raw materials in the CR were up considerably (+67.1%).
Also the y-o-y increase in prices of coke, refined petroleum products and nuclear fuel was in the 4th quarter at the highest level in 2004. There was a gradual deceleration during the 4th quarter. While y-o-y prices were higher by 55.1% in October, the increase got below the 50% level in November and further dropped to 46.2% in December. Both prices of refined petroleum products and prices of coke were higher than in the 4th quarter of 2003. Petroleum prices on world markets were very volatile during the year. However, in spite of m-o-m decreases, petroleum was considerably dearer than in 2003. Prices of petroleum Brent on world markets grew by 33.2% within 11 months (with high fluctuations during the year). The price was up to 49.34 USD/barrel in October 2004 from 30.63 USD/barrel recorded at the beginning of 2004.
Prices of chemicals, chemical products and man-made fibres responded to the changes in petroleum prices by a rise of 11.9% y-o-y in the 4th quarter. The y-o-y increases showed a decreasing trend in individual months of the 4th quarter.
Prices of food products, beverages and tobacco saw another development. The y-o-y growth in the 4th quarter was the lowest in 2004, but the trend of prices during the 4th quarter was very similar to that of preceding CZ-CPA activities. Whereas prices at the beginning of the quarter were still higher by 4.3% y-o-y, the increase dropped to 2.6% in December. An important role in the slowdown was played by prices of grain mill products, starches and starch products, which were only by 0.7% higher at the end of 2004, but they were by 16.0% higher in July before the harvest. Rise in prices of prepared animal feeds even stopped and the November and December price levels were below those of 2003. The decreasing trend was affected by wheat prices, which fell considerably after the harvest. Food wheat and fodder wheat was by 14.5% and 10.3%, respectively, less expensive in October than in October 2003. Wheat prices were falling also on world markets, they were lower by 20.8% in November. Increases in prices of dairy products and ice cream were slightly above five per cent during the 4th quarter (+5.2% in December, +5.8% in November). Prices of meat and meat products were up by 4.7% in the 4th quarter of 2004 (+4.5% in October).
Prices of electrical energy, gas, steam and water were below the annual average in the 4th quarter of 2004. They were by 3.3% higher than a year earlier, of which electrical energy by 3.6%, heat by 1.7% and water by 5.3%. Also prices of coal, lignite and peat grew (by 18.8%).
The big differentiation in price development between industrial CZ-CPA activities continued. Only two CZ-CPA activities reported markedly lower prices than in the 4th quarter of 2003: transport equipment (-1.3%) and electrical and optical equipment (-0.7%).
Compared to the European Union, industrial producer prices in the Czech Republic grew faster y-o-y in 2004 than in the EU25 on average.
Construction work prices rose by 4.3% y-o-y in the 4th quarter (just like in the 3rd quarter) and construction material inputs prices went up by 8.3% (+8.0% in the 3rd quarter).
Y-o-y growth of market services prices decelerated to 2.2% in total in the 4th quarter (+2.5% in the 3rd quarter). The decisive effect on the overall price level had in particular prices of real estate, renting and business services , which grew by 2.6% (+3.3%). In this area, mainly prices of advertising services (+7.3%) and prices of computer and related services (+6.3%) rose, on the other hand prices of real estate services dropped (-1.5%). Prices of financial intermediation services, except insurance and pension funding services, were up by 3.7% y-o-y in the 4th quarter (+3.1% in the 3rd quarter), especially due to higher prices of monetary intermediation services (+6.9%); prices of leasing services fell (-1.3%). Prices in insurance and pension funding services, except compulsory social security services, rose by 1.9% (+1.6% in the 3rd quarter). Prices of fire and other damage to property insurance services grew (+7.0%), prices of motor vehicle insurance services decreased (-0.5%). Prices of post and telecommunication services were by 0.4% higher in total in the 4th quarter due to higher prices of fixed telephone services by 1.4%. Prices of national freight transportation services grew by 1.0% in the 4th quarter. Prices of freight transportation services by road were by 2.6% higher.
Producer prices in the year 2004
Agricultural producer prices rose by 8.1% in total in 2004 (a fall of 2.9% in 2003). Crop product prices were higher by 11.6%; their growth decreased considerably from 36.8% in the 1st quarter to a fall of 4.7% in the 4th quarter. However, animal product prices had an opposite trend, being by only 0.5% higher in the 1st quarter and by 7.8% in the 4th quarter; the average growth in the year 2004 was 6.2%.
Y-o-y increases were recorded in 2004 for prices of cereals (+10.1%), potatoes (+48.5%), sugar beet (+60.3%) and fruit (+2.7%). Only prices of oil seeds (-2.8%) and vegetables (-0.2%) were lower. From among animal products, particularly pigs (+10.1%), cattle for slaughter (+9.0%) and poultry (+4.5%) were more expensive. Also prices of milk and eggs rose (+3.1% and +2.9%, respectively).
Industrial producer prices developed in 2004 in principle differently than in preceding two years. They rose by 5.7% y-o-y in total, whilst they decreased in preceding two years (-0.3% in 2003 and -0.5% in 2002). At the same time, they exceeded increases in 1996 to 1998 and 2000 and reached a maximum of last nine years.
A dominant influence on the increase of the total level of industrial producer prices in 2004 had sharp increases in prices of basic metals and fabricated metal products; coke, refined petroleum products and nuclear fuel; and food products, beverages and tobacco. As the graph shows, these CZ-CPA activities followed quite a different development pattern in 2004 than in 2003 and 2002.
There was a considerable rise in demand for metals and petroleum in the world in 2004, which resulted in increasing prices. The growing trends showed themselves in prices of industrial products in the CR. Prices of basic metals and fabricated metal products grew by 18.5% on average in 2004 (a maximum of last 13 years, only 1991 saw a higher increase). Prices of iron, steel and ferro-alloys were up by 40.3%, prices of cast-iron and steel tubes and tube fittings by 21.7%, and prices of other first processed iron and steel by 26.7%. Prices of metal secondary raw materials grew simultaneously, their annual average was by nearly half higher than in 2003. Higher prices of metals partially affected prices of machinery and equipment in 2004, but they rose considerably less, by 1.5% in total (these prices are influenced by a wide range of other effects, not only prices of input materials).
Prices of coke, refined petroleum products and nuclear fuel were up by 27.0% on average in 2004 (the highest rise since 2000). The prices were highly volatile during the year, ranging from -6.8% in the 1st quarter to +49.6% in the 4th quarter. They reflected the dramatic growth of petroleum prices on world markets amounting to 33.2% on average within 11 months. Both prices of refined petroleum products and prices of coke were growing. Neither prices of chemicals, chemical products and man-made fibres were left untouched by effects of petroleum prices: they rose by 6.7% in total, of which most prices of basic chemicals (+11.9%), where petroleum is often a primary or secondary technology input.
Prices of food products, beverages and tobacco grew by 4.8% in 2004 (the highest y-o-y rise since 2001). The highest price increases were reported for grain mill products, starches and starch products (+10.4%), prepared animal feeds (+8.2%) and other food products (+7.9%; particularly bread, fresh pastry goods and cakes). The growth of prices of these products weakened after the harvest and some of the prices at the end of the year were lower y-o-y. Prices of dairy products and ice cream grew by 5.5% in total and prices of meat and meat products rose by 4.3%.
Costs in all industrial CZ-CPA activities (CZ-CPA 10-41) reflected, depending on their energy demand, higher prices of electrical energy, gas, steam and water by 3.9%, of which electricity by 4.9%, water by 5.0% and heat by 1.1%. Also other sources of energy became more expensive. Prices of coal (including lignite and peat) went up by 5.5%.
Construction work prices grew by 3.7% on average in 2004 (+2.1% in 2003) and construction material inputs prices by 5.8% (a decrease of 0.9% in 2003).
Market services prices were by 2.3% higher y-o-y in total (+1.6% in 2003). In particular, prices of real estate, renting and business services rose (+3.0%; especially higher prices of advertising services by 3.9% and computer and related services by 7.8%). Prices of financial intermediation services, except insurance and pension funding services, were up by 2.8% y-o-y, predominantly due to higher prices of monetary intermediation services by 6.3%. Prices of insurance and pension funding services, except compulsory social security services grew by 1.7%. Prices of fire and other damage to property insurance services rose by 4.8%, prices of motor vehicle insurance services by 1.3%. Prices of post and telecommunication services increased by 0.2% in total due to higher prices of national post services by 0.4%. A price increase was recorded also in national freight transportation services (+1.0%). Particularly prices of freight transportation services by road rose (+3.1%).
