Producer price indices - 4. quarter of 2005 and year 2005
Product Code: e-7032-05
Producer price indices in the fourth quarter of 2005 and in the year 2005
Producer prices in the fourth quarter of 2005
Agricultural producer prices were down by 5.9% year-on-year in Q4 2005 (-8.8% in Q3 2005). This fall was affected by crop product prices, which were by 10.1% lower (-21.6% in Q3 2005). Animal product prices fell by 3.7%.
The fall in crop product prices was mainly influenced by prices of potatoes (-17.4%) and cereals (-13.1%). The prices of sugar beet (-12.3%) and oil plants (-5.5%) were lower too. The prices of vegetables and fruit were up (+30.0% and +18.9%, respectively). The reason for the decrease of animal product prices was in particular lower prices of pigs (-10.5%), poultry (-5.9%) and eggs (-4.9%). The prices of cattle for slaughter rose (+6.4%).
The rate of growth of industrial producer prices slowed down during 2005 from 106.9% in Q1 to 100.0% in Q4.
The decisive effects on the development in Q4 2005 were:
· higher decreases in the prices of basic metals and fabricated metal products to 5.0% and prices of food products, beverages and tobacco to 2.9%,
· a slowdown of the price increase in coke, refined petroleum products to 8.6%.
The prices of basic metals and fabricated metal products were lower year-on-year for the first time in August; in December they were lower by 5.5%. On average for Q4 2005, these prices dropped by 5.0% in total (-1.2% in Q3). The import prices of metal ores were on the decrease too (-0.8% in October 2005 year-on-year). A falling year-on-year trend was also observed for the prices of ‘other manufactured goods n.e.c.’ (-4.0% in Q4 2005 due to prices of ‘metal secondary raw materials’).
Prices of food products, beverages and tobacco dropped by 2.9% on average in Q4 (-2.1% in Q3). Less expensive were also products whose inputs reflected lower prices of agricultural producers of crop products. Lower prices were reported for ‘prepared animal feeds’ (-12.8%), ‘grain mill products, starches and starch products’ (-9.2%) and ‘animal and vegetable oils and fats’ (-4.3%). The price of wheat dropped by CZK 195/t year-on-year in November 2005 and wheat was sold for CZK 2 944/t. Also the price of rape was down. In Q4 2005, the prices of ‘meat and meat products’ dropped (-2.6%) and so did the prices of ‘tobacco products’ (-3.8% to offset higher excise duty) and prices of ‘dairy products and ice cream’ (-2.4%).
In Q4 2005, the price increase of coke, refined petroleum products significantly decelerated to 8.6% (+11.6% in Q3). Petroleum Brent was sold for USD 56.28/barrel on the London Stock Exchange in November (USD 59.58/barrel in October). In the course of the year the petroleum prices fluctuated considerably.
The prices of electrical energy, gas, steam and water were up by 7.3% year-on-year in Q4 2005 (roughly the same figure as in Q3), of which ‘production and distribution services of electricity‘ by 8.2%, and ‘steam and hot water supply services‘ by 6.4%. The prices of ‘coal and lignite; peat’ reduced markedly the year-on-year growth to 3.3% (from 23.0% in Q3) due to a higher comparable basis of October 2004.
Construction work prices rose by 2.6% in Q4 2005 (+2.5% in Q3), construction material inputs prices were by 0.4% lower (+0.8% in Q3).
Year-on-year increase in the prices of market services reached 2.3% in total in Q4 2005. The development of the overall price level was affected in particular by the prices of real estate, renting and business services , which grew by 2.0%; mainly the prices of ‘advertising services‘ (+2.2%) and ‘computer and related services’ (+5.1%) were up. The prices of financial intermediation services, except insurance and pension funding services rose by 1.9% year-on-year in Q4, especially due to higher prices of ‘monetary intermediation services’ (+2.9%). The prices of insurance and pension funding services grew by 1.2%. The prices of fire insurance were higher by 3.3% and prices of insurance against theft by 4.1%. The prices of post and telecommunication services were higher by 3.4% in total for Q4 owing to higher prices of operation of fixed telephone lines (+10.4%) and ‘national post services’ (+15.6%). The prices of ‘mobile telephone services’ fell by 10.4%. Prices in national freight transport rose by 2.4%. A growth of 4.8% was recorded for road freight transport.
Producer prices in the year 2005
Agricultural producer prices in total for the whole year 2005 were down by 9.2% (+8.1% in 2004). Crop product prices were lower by 25.0% (-38.2% in Q1 and -10.1% in Q4). Animal product prices grew by 0.4% in total (+10.9% in Q1 and -3.7% in Q4).
Year-on-year price decreases were registered for cereals (-25.1%), potatoes (-59.7%, vegetables (-15.0%), oil plants (-8.1%) and fruit (-5.5%). Among the groups of animal products, higher prices were reported for cattle for slaughter (+12.2%) and milk (+2.8%). The prices of pigs (-1.6%), poultry (-3.8%) and eggs (-17.5%) were lower.
Industrial producer prices were up by 3.0% on average in 2005 year-on-year, which was by nearly a half less than in 2004 when the growth reached 5.7%. In comparison to the price development in the ten-year time series, the growth of prices in 2005 was at the average level. A similar price increase was observed in 2001 when the overall price level was up by 2.9% (a high rise of 7.6% was recorded in 1995). However, we should bear in mind that prices in 2003 and 2002 were down (by 0.5% and 0.3%, respectively). During the year 2005, the dynamics of growth weakened markedly. While prices in January were still by 7.2% higher year-on-year, in November they were at the 2004 level and in December by 0.3% lower.
Of an important influence on the slowdown of the growth of the overall level of industrial producer prices in 2005 were prices of coke, refined petroleum products whose increase decelerated to 16.4% (from 27.0% in 2004). The growth of the overall price level was further cushioned by a lower rise in the prices of basic metals and fabricated metal products to 6.8% (from 18.5% in 2004). Even though the rate of growth was lower than in 2004, yet the year-on-year price increase in most groups of products in 2005 was still very significant. The prices of ‘basic iron and steel and ferro-alloys’ were up by 6.4% year-on-year in 2005, prices of ‘tubes’ by 12.1% and prices of ‘other first processed iron and steel’ by 8.4%. The development trend of food prices changed completely in 2005. While prices of food were among the pro-growth factors in 2004, they were decreasing in 2005 and had a lowering effect on the overall price level. On average for the year 2005, food prices were below the 2004 level. In total, the prices of ‘food products, beverages and tobacco’ were 1.1% down on 2004. They fell in a prevailing majority of groups, most in ‘prepared animal feeds’ (-12.5%), ‘grain mill products, starches and starch products’ (-10.0%) and ‘animal and vegetable oils and fats’ (-8.0%). The prices of these commodities responded to a price decrease in crop products produced by agricultural producers. On average for the year 2005, higher prices were registered for ‘meat and meat products’ (+2.0%, in spite of a decrease in Q4) and particularly for beverages (+3.1%). On the other hand, the prices of electrical energy, gas, steam and water grew faster in 2005 than in 2004. On average for 2005, they were up by 7.2%, which was by nearly a half faster growth than in 2004 (when they grew by 3.9%). In 2005, the prices of ‘production and distribution services of electricity‘ rose by 8.8%, prices of ‘steam and hot water supply services‘ by 4.5% and prices of ‘collected and purified water; distribution services of water‘ by 4.4%. Also other energy sources were more expensive. The prices of ‘coal and lignite; peat’ were up by 17.3%.
Construction work prices grew by 3.0% on average in 2005 (+3.7% in 2004), construction material input prices by 3.1% (+5.8% in 2004).
The prices of market services in total were higher by 1.9% year-on-year in 2005 (+2.3% in 2004). On the increase were the prices of real estate, renting and business services , which grew by 1.9% (higher prices of ‘advertising services‘ by 2.7% and ‘computer and related services’ by 5.6%). The prices of financial intermediation services, except insurance and pension funding services rose by 2.8% year-on-year, especially due to higher prices of ‘monetary intermediation services’ (+4.7%). The prices of insurance and pension funding services grew by 1.0%. The prices of fire insurance were higher by 2.8%, prices of insurance against theft by 3.3% and prices of motor car insurance by 0.6%. The prices of post and telecommunication services were higher by 1.8% in total owing to higher prices of ‘national post services’ (+14.3%) and of telephone operation (+7.2%). On the other hand, the prices of ‘mobile telephone services’ fell by 9.8%. A price increase occurred in national freight transport (+1.9%). In particular the prices of road freight transport grew (+3.4%).