Increase in producer prices stopped
According to Statistics Estonia, in January the increase in producer prices slowed down to 0.5% in the manufacturing sector. The prices were 1.2% lower than in December. This was the slowest increase in prices since the beginning of 2004 and next month there will probably already be a decrease in comparison with the previous year.
Due to the economic decline, the price increases have stopped in most sectors and even turned negative in some cases. Most inputs have become cheaper and also the pressure on salaries has decreased. Also the strong euro, which has made raw materials cheaper, has contributed to the deceleration of price increases.
In comparison with the previous year, the price decreases were the fastest in furniture industry and in the manufacturing of other products (-2.7%), in monthly comparison the decrease was even 4.7%. In food production the prices increased by 1%, in textile industry 0.8% and in chemical industry 2.2% in the course of the year.
According to the survey conducted in January by the Estonian Institute of Economic Research already more than a fourth of the heads of industrial enterprises expected the continuation of price decreases in the next months. Less than a tenth of the respondents forecast a price increase. There were more expectations for price decreases in wood industry and in the manufacturing of metal products, where it was forecast by more than a half of the respondents.
In January the decrease trend in export and import prices continued. Export prices were on an average 1% lower than in January last year and 0.9% lower than in December.
The decrease in import prices was even faster, the prices decreased by 4.6% in annual comparison and by 2.7% in monthly comparison. Export prices turned to a decrease for the first time in annual comparison, the turn in import prices took place already in December.
The most dramatic decrease in export prices was still in forestry, the price of logs decreased 28% in a year and in monthly comparison by 4%. The comparison basis of January last year was still very high (increase by 52%), however. In order to stay in competition in foreign markets, metal-working enterprises had to continue the reduction of the export prices of their products which decreased by one-tenth both in comparison with the previous year and in a month. In wood processing the prices decreased by a couple of per cent and in chemicals industry they turned to a decrease for the first time (-1%). The export prices of the remaining sectors still showed an increase trend in the course of the year. Export prices of construction materials increased by 9% and the prices of machinery and equipment by 7%. The average price increase in the manufacturing of metal products, food and drinks production and textile and clothes industry was 4–5%. Besides metal products, the export prices of other industrial sectors mentioned increased also in comparison to December last year.
In January, import prices were still influenced most by the fast falling of oil prices in the world market (-39% in comparison with the previous year), which has had a delayed impact also on import prices of chemical products (-2%). The decrease in the import prices of timber and timber products accelerated to 15%. The highest annual growth of import prices was also in metals (17.5%), although their import prices only increased by one per cent in a month.
Also the import prices of food products and drinks continued an increase in annual comparison (6%) but there was no considerable change in comparison with December. The import prices of agricultural products, textile products and paper and paper products increased by 4–5% in a year.
Next month the downward pressure on both export and import prices will continue as the low ebb of the global economy will persist and therefore also oil prices in the global market will remain at a low level.
