Official data released on 9th August shows that in July, 2012, the ex-factory price of industrial products of China fell 2.9% year on year, larger when compared with 2.1% in June, and a drop of 0.8 percentage points month-on-month. The purchase price of industrial products saw a year-on-year decline of 3.4% compared with 2011. The average ex-factory and purchase prices of industrial products from January to July, 2012 dropped 1.0% and 0.8% respectively.
I. Year-on-Year Variation of PPI of Industrial Products (2012 vs. 2011)
Among the ex-factory price for manufactured products, industrial materials price declined 3.9% year-on-year, among which the extractive industry price dropped 6.2%, the raw material industry price fell 4.5%, and the processing industry price declined 3.4%. Cost of living rose 0.4%, among which the food prices rose 0.8%, clothing 1.9%, daily use articles 0.6%, but durable consumer goods dropped 1.2%. Within purchase prices for industrial products, the price of non-ferrous metal material and wires fell 9.1% year on year, ferrous metal 7.7%, chemical raw material 6.0%, fuels and energy 1.7%, and timber and pulp 0.1%.
II. Month-to-Month Variation of PPI of Industrial Products (July vs. June)
Among the ex-factory price for industrial products, the productive material price declined 1.0% month-on-month, of which the extractive industry price dropped 3.7%, raw material industry 1.5%, and the processing industry price 0.5%. The cost of living price remained flat, including the prices for foods, clothing and durable consumer goods. The price of articles for daily use dropped 0.1%. Within purchase prices for industrial products, the price of non-ferrous metal material and wires dropped 0.4% month-on-month, the ferrous metal price 1.0%, chemical raw material 1.1%, and fuels and energy 2.2%.
In view of the unexpected decline of PPI of industrial products in July, export growth will face a slowdown risk.
Major PPI of Industrial Products of July, 2012:
| July | Average between January and July | ||
| Month-on-Month Variation (%) | Year-on-Year Variation (%) | Year-on-Year Variation (%) | |
| I. Ex-factory Price of Industrial Products | -0.8 | -2.9 | -1.0 |
| Productive materials | -1.0 | -3.9 | -1.6 |
| Excavation | -3.7 | -6.2 | 0.8 |
| Raw materials | -1.5 | -4.5 | -0.7 |
| Processing | -0.5 | -3.4 | -2.3 |
| Cost of living | 0.0 | 0.4 | 1.2 |
| Food | 0.0 | 0.8 | 2.1 |
| Clothing | 0.0 | 1.9 | 2.4 |
| Articles for daily use | -0.1 | 0.6 | 1.1 |
| Durable consumer goods | 0.0 | -1.2 | -0.9 |
| II. Purchase price of industrial products | -0.8 | -3.4 | -0.8 |
| Fuels and energy | -2.2 | -1.7 | 3.0 |
| Ferrous metals | -1.0 | -7.7 | -4.8 |
| Non-ferrous metal material and wires | -0.4 | -9.1 | -5.5 |
| Chemical raw materials | -1.1 | -6.0 | -2.9 |
| Timber and pulp | -0.2 | -0.1 | 0.9 |
| Building materials and non-metallic materials | -0.4 | -1.7 | 0.8 |
| Other industrial raw materials and semi-finished products | -0.2 | -1.6 | -0.5 |
| Agricultural and sideline products | 0.0 | -2.3 | 0.6 |
| Textile raw materials | -0.3 | -1.8 | -0.3 |
Notes to Chart:
1. Index Explanation
Producer price indexes for industrial products (PPI) include ex-factory price index and purchase price index. The ex-factory price index reflects the variation trend and range of the initial selling price of a product of an industrial enterprise. The purchase price index reflects the variation trend and range of the purchase price of a product as intermediate input by an industrial enterprise.
2. Statistics Range
The statistical investigation of ex-factory price index covers the prices of more than 11000 kinds of industrial products under 1702 basic categories, while that of purchase price index covers the prices of more than 6000 kinds of industrial products under more than 900 basic categories.
3. Investigation Methods
The investigation of producer price indexes of industrial products combines key-point investigation and typical investigation. Key-point investigation is applied to enterprises with main business income of more than RMB 20 million, while typical investigation to enterprises with main business income of less than RMB 20 million. The investigation involved nearly 60 thousand industrial enterprises from over 400 cities of the country.
