PPI rises for first time in seven months

2010/01/28

The Producer Price Index (PPI) -- which tracks the cost of goods leaving factories and mines -- increased for the first time in seven months in December, Statistics SA said on Thursday.

According to the Pretoria-based agency, the PPI for December rose annually by 0.7 percent from a decrease of 1.2 percent year-on-year in November.

This was higher than most economists had forecast.

"The figure was mainly due to higher commodity prices, and higher food prices at agricultural level," Nedbank economist Carmen Altenkirch said.

"We've been somewhat insulated due to the strength of the rand."

Looking ahead Altenkirch said she did not expect significant pressure on producer prices.

"Demand is still weak... but the two risks are Eskom's tariff hike and any rand weakness." (Source” Sapa)