Producer price indices - 4. quarter of 2006 and year 2006

Producer price indices in Q4 2006

Prices of agricultural producers were up by 1.0% in Q4 2006 compared to Q3 2006. Prices of potatoes increased by 12.4%, cereals by 4.8% and eggs by 7.6%. Further, prices of oil plants and poultry were up. Prices of pigs dropped by 4.5% and vegetables by 1.2%, fruit and cattle for slaughter were down as well.

Prices of agricultural producers were up by 2.4% year-on-year in Q4 2006 (by 2.6% in Q3 2006). The growth was affected by prices of crop products, which rose by 12.8%. The prices of animal products were lower by 2.5%.
Rise in the prices of crop products was influenced mainly by higher prices of potatoes (+126.0%), cereals (+21.3%) and oil plants (+16.2%). The prices of vegetables were up by 13.5% and prices of fruit dropped by 6.9%. Also prices of sugar cane were lower by 22.1%. Decrease in the prices of animal products was predominantly due to lower prices of poultry (-7.5%). The prices of milk were down by 5.4%. Prices of cattle for slaughter increased by 0.4%.

Industrial producer prices decreased by 0.1% in Q4 2006 compared to Q3 2006. Particularly prices of ‘coke, refined petroleum products’ dropped by 10.1%. Prices of ‘food products, beverages and tobacco’ (by 0.1%) and ‘transport equipment’ (by 0.4%) were slightly down. On the contrary, prices of ‘basic metals and fabricated metal products’ continued to grow, compared to Q3, by 1.6%.

Industrial producer prices increased year-on-year by 2.2% in Q4 2006 compared to Q4 2005 (+2.5% in Q3).

The decrease of ‘ coke, refined petroleum products’ prices by 5.0% (in Q3 prices increased by 7.2%) had a considerable weakening effect on the year-on-year growth of the total price level. The fluctuating development of petroleum prices on the world market reflected greatly in the prices of this division.
Prices of ‘ electrical energy, gas, steam and water’ were up by 6.6% year-on-year in Q4 2006, of which prices of electricity including distribution by 8.4% and steam and hot water supply by 3.3%.

In Q4 2006, prices of ‘ basic metals and fabricated metal products’ with the year-on-year growth of 4.6% also reached above the average price level. Among the individual groups, prices of basic precious metals and other non-ferrous metals increased markedly year-on-year. Their growth exceeded the three percent limit already in Q3 2006 and was significant also in Q4 2006 (+ 32.3%).

Prices of ‘ food products, beverages and tobacco’ started to have a slight inflationary trend in Q4 2006 (while until the end of August 2006 they had been decreasing for sixteen months). In Q4 2006, they reached by 0.2% above the level of Q4 2005 prices. Among individual commodities only ‘meat and meat products’ (-1.3%) and ‘dairy products’ (-1.8%) remained under the level of Q4 2005. On the contrary, lower harvest of cereals in 2006 and higher prices were the most important factors influencing the price growth in divisions where cereals are the main raw material. In connection with that in Q4 2006 prices of ‘grain mill products, starches and starch products’ and ‘bread, fresh pastry goods and cakes’ and ‘prepared animal feeds’ increased (+7.1%, +8.8% and +2.0%, respectively). Also prices of beverages were up, their prices being higher by 3.2% in Q4 2006 year-on-year. ‘ Transport equipment’ prices were again lower year-on-year in Q4, their drop deepened to 1.5%.

Construction work prices were up by 0.2% in Q4 2006 compared to Q3 2006; construction material input prices by 0.4%.
Construction work prices were up by 3.2% year-on-year in Q4 2006 compared to Q4 2005 (similarly as in the previous quarter); construction material input prices were up by 3.5% (in Q3 by 2.0%).

The prices of market services in Q4 2006 compared to Q3 2006 were down by 0.3%. The prices of real estate, renting and business services dropped by 0.4% as a consequence of the decrease of ‘exhibition, fair and congress organisation services’ prices by 7.4%.
The year-on-year growth of market services prices reached in Q4 2006 compared to Q4 2005 3.5% in total . Influences on the development of the overall price level were mainly prices of real estate, renting and business services, which were up by 5.2%. Especially prices of ‘advertising services’ (+16.1%) and prices of ‘architectural, engineering and related technical consultancy services’ (+4.7%) increased. Prices in financial intermediation services, except insurance and pension funding services grew by 2.9% year-on-year in Q4 2006 particularly due to higher prices of ‘monetary intermediation services’ by 3.9%. Insurance prices rose by 0.6%. The prices of motor vehicle insurance services (+0.9%) grew, while the prices of fire property insurance services (-0.5%) and prices of theft insurance services (-0.2%) were down. The prices of post and telecommunication services were higher by 0.4% in total in Q4 2006 due to increased prices of telephone operation (fixed lines) and mobile telephone services identically by 0.4%. National freight transportation services saw higher prices by 0.1%. A 0.9% price increase was registered for ‘freight transportation services by road’.


Producer prices in the year 2006

Agricultural producer prices in total for the whole year 2006 were up by 2.2% (-9.2% in 2005). Crop product prices were higher by 13.3%, animal product prices dropped by 2.9%.
In 2006, price were higher year-on-year for cereals (+10.0%), potatoes (+69.6%), vegetables (+33.7%), oil plants (+13.5%) and fruit (+9.8%). Among the groups of animal products, higher prices were reported for cattle for slaughter (+0.8%). The prices of pigs (-1.9%) and poultry (-8.9%) were lower.

Industrial producer prices were up by 1.6% in 2006 year-on-year. It has been the lowest growth in the last three years (+3.0% in 2005 and +5.7% in 2004). From a longer time perspective, industrial produces prices developed in individual months unevenly and went through markedly different development stages, beginning with a rapid growth in 1995 (+7.6%) and leading to decreases by 0.5% and 0.3% in 2002 and 2003.

In 2006, mainly a slowdown of the growth of prices of ‘ coke, refined petroleum products’ to 7.7% from 16.4% in 2005 occurred. A strong potential of this development was recently the slowdown of petroleum price growth in the world markets. The price of Brent petroleum increased by 21.2% on average in the last eleven months in 2006; while in the same period of 2005 it was 45.3%.

Another important factor was the change of price development of ‘ basic metals and fabricated metal products’. On average in the whole 2006 prices dropped by 0.7%, while in 2005 their growth of 6.8% and in 2004 even 18.5% belonged to the biggest in the last twelve months (also significant growths of 9.8% were in 1995 and 8.5% in 1998).

The prices of ‘ electrical energy, gas, steam and water’ were up by 7.5% (+7.2% in 2005). In particular prices of electricity including distribution increased by 8.9% and steam and hot water supply by 6.2%.

Prices of ‘ food products, beverages and tobacco’ products were the whole year on average lower by 1.4% year-on-year. Lower were prices of ‘meat and meat products’ by 1.7% and prices of ‘dairy products’ by 2.3%.

Construction work prices grew by 2.9% on average in 2006 (+3.0% in 2005), construction material input prices by 1.3% (+3.1% in 2005).

The prices of market services in total were higher by 3.7% year-on-year in 2006 (+1.9% in 2005). On the increase were the prices of real estate, renting and business services, which grew by 4.8% (higher prices of ‘advertising services‘ by 15.8% and ‘architectural, engineering and related technical consultancy services’ by 4.6%). The prices of financial intermediation services, except insurance and pension funding services rose by 2.7% year-on-year, especially due to higher prices of ‘monetary intermediation services’ (+3.9%). The prices of insurance and pension funding services were higher by 1.3%. The prices of motor car insurance increased by 1.6%. The prices of post and telecommunication services were higher by 2.0% in total owing to higher prices of telephone operation (+3.9%). On the other hand, the prices of ‘mobile telephone services’ fell by 0.7%. A price increase occurred in national freight transport (+0.9%). In particular the prices of road freight transport grew (+2.7%).

In comparison to the European Union (according to preliminary results), the development of industrial producer prices in the Czech Republic is becoming closer to that in the EU25 in the long term. Compared to 2000, prices in the Czech Republic in November 2006 were up by 13.2% and in the EU25 by 18.9%. Prices in France (+11.2%) and in Lithuania (+14.4%) grew at a similar rate like in the Czech Republic in November. Germany observed a 17.8% increase. High above-the-EU25-average increases against 2000 were registered in Hungary, where the growth reached +53.1% in November. Prices were also high in Luxembourg (+41.6%) and Slovakia (+40.6%) and Denmark (+33.6%).