IPP
Prices in Industry increase 1.48% in December and close 2024 with high of 9.42%
February 04, 2025 09h00 AM | Last Updated: February 04, 2025 03h30 PM
In December 2024, prices in the industrial sector increased 1.48% compared to the previous month, the eleventh positive result in a row. As a result, industrial inflation closed 2024 with an increase of 9.42%, the fourth highest cumulative value in the year up to December since the beginning of the time series, in 2014. The increase in 2024 surpassed the index recorded in 2023 (-4.99%) by more than 14 percentage points (pp). These data are from the Producer Price Index (IPP), released today (4) by the IBGE.
“The result of the IPP in December and in 2024 as a whole can be partially explained by the recent and current dollar appreciation. This is because the exchange rate, from the producer's perspective, impacts several industrial sectors. In December, the dollar rose 5.0% against the real and ended the year with an cumulative increase of 24.5%. Therefore, practically all sectors that stood out in the long-term indicator were impacted, to some extent, by the dollar: food, basic metals, chemicals, tobacco, wood and other transportation equipment”, explains Murilo Alvim, IPP analyst.
In the case of food, the activity was responsible for the greatest influence in December (0.49 pp) and in the cumulative indicator for the year (3.48 pp). “This result is largely explained by the higher prices of meat, especially beef and poultry. Animal slaughter and manufacture of meat products, for example, rose 2.84% in the month, and have presented, since August, a monthly change always above 2%. December's result can be explained by factors such as a stronger demand for products, increased exports, which end up reducing supply in the domestic market, and, precisely because meat is an exportable product, it also suffered an impact from dollar appreciation. In addition to meat, this month also saw increases in orange juice and soybean extraction residues,” adds Mr. Alvim.
After December's result, the food sector closed 2024 with an cumulative increase of 14.08%, the most intense positive change in the activity since December 2021 (18.66%). According to Mr. Alvim, “in the cumulative indicator for the year, meat also appeared as the main influence, but there was also an impact caused by changes in coffee, whose economic group increased by 69.28% in 2024, due to a global decline in supply (under the impact of weather conditions and logistical challenges), and soybean oil, which has also been impacted by the dollar, with exports heating up and supply reduced in the domestic market.”
The IPP measures changes of “factory-gate” prices of products, that is, prices without taxes and freight, of 24 activities in the mining and quarrying and manufacturing industries. The activities that, in December 2024, had the greatest changes in the year-to-date were basic metals (29.29%), tobacco (19.25%), wood (17.97%) and other transportation equipment (17.68%). The main influences on the cumulative total of the general industry came from food (3.48 pp), basic metals (1.71 pp), other chemicals (0.94 pp) and motor vehicles (0.36 pp).
From the perspective of the broad economic categories, the annual result is established based on the change of 7.52% in capital goods (with an influence of 0.58 pp), 8.49% in intermediate goods (4.73 pp) and 11.24% in consumer goods (4.11 pp).
In relation to December 2024, the change compared to the previous month was 1.48%. In November, compared to October, the industry had registered an expansion of 1.25%.
In the last month of last year, 22 of the 24 industrial activities investigated showed positive price changes compared to November, following the trend of general industry. The highlights in this regard were mining and quarrying industries (5.14%), basic metals (4.73%), other transportation equipment (3.26%) and tobacco (2.59%). In terms of influence, the activities that stood out the most, in addition to food (0.49 pp), were basic metals (0.32 pp), mining and quarrying industries (0.24 pp) and oil refining and biofuels (0.09 pp).
Among the broad economic categories, the price change from November to December was 1.40% in capital goods (with an influence of 0.11 pp), 1.74% in intermediate goods (0.96 pp) and 1.11% in consumer goods (0.42 pp).
Learn more about the IPP
The IPP monitors the average change in sales prices received by domestic producers of goods and services, and their evolution over time, signaling short-term inflationary trends in the country. It is an essential indicator for macroeconomic monitoring and a valuable analytical tool for decision-makers, whether public or private.
The survey investigates, in more than 2,100 companies, the prices received by producers, exempt from taxes, tariffs and freight, defined according to the most common commercial practices. Around 6,000 prices are collected monthly. The complete IPP tables are available on Sidra. The next IPP release, for January, will be on March 14.
