The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes the increase in the Producer Price Index (PPI), as per the data released by Statistics South Africa (Stats SA) today, and hopes that businesses will benefit from the positive trajectory via higher selling prices.
SEIFSA Chief Economist Michael Ade described the data as encouraging, especially considering that selling prices have been rising since April and May, spanning the COVID-19 pandemic-induced economic lockdown levels four and five. He said the selling price inflationary trend augurs well and should help in reducing operational cost pressures on businesses and boost margins, since companies will now have a leeway to pass cost increases to intermediate and final consumers.
The data released by Stats SA indicates that the annual percentage change in the PPI for intermediate manufactured goods increased from 2.4% in July to 3.2% in August. The increase is consistent with the annual change in the PPI for final manufactured goods, which also increased from 1.9% in July to 2.4% in August, generally spelling good news for local manufacturers.