Producer price index, 15 June 2006

While the price of electricity decreased by more than 20 per cent in May, the past month saw the price recover somewhat, with an increase of 11.7 per cent. The past few months' swings in electricity prices are quite large, even when compared with the usually volatile energy prices.

After a long period of growth, with a total increase of 29 per cent from November to May, the sub-index for metals prices fell by 5.3 per cent in June. This is the largest one-month reduction since the new index methodology was introduced in December 2000. Within the metal industry non-ferrous metals had the largest drop, with 7.1 per cent. Other industries saw modest price changes, mostly below one per cent. The index for manufacturing and mining decreased by 0.8 per cent.

In the domestic market prices rose by 0.6 per cent despite a slight fall in the prices of crude oil and natural gas. The difference in developments in the domestic market index and the total index stems from a smaller decrease in metals prices at home than for exports and the fact that petroleum prices have a significantly smaller weight in the domestic index than in the export index.

By broad economic categories the development in the metals market is evident through a decrease of 1.9 per cent in intermediate goods. After a period of high growth, and May's 6 per cent reduction, prices of energy goods were quite stable during June, with an increase of only 0.5 per cent.

June 2005 to June 2006: A total rise of 13.2 per cent

After a winter and spring of high producer prices compared with the same period of the previous year, the 12-month price increase for June was 13.2 per cent. This is the first time the index growth over the preceding twelve months is below 15 per cent since October of 2005. Electricity prices were 45.8 per cent higher in June than in the same month last year.