Production costs jump more than 10% in January from year ago

Affin Hwang Research said across the value chain, production players will be the first to benefit from higher oil prices due to their oil-producing fields.

KUALA LUMPUR: Local production costs as measured by the Producer Price Index jumped 10.2% in January 2017 from a year ago, driven by the mining sector and agriculture.

The Statistics Department said on Tuesday the highest increase was recorded by mining index (+42.8%) followed by agriculture, forestry & fishing (+33.4%), manufacturing (+5.6%) and electricity & gas supply (+3.2%). 
However, the index for water supply remained unchanged.

“The PPI for local production rose by 2% in January 2017 compared to December 2016,” it said. 

The higher costs was due to increases in three sectors where mining increased 6.3%, agriculture, forestry & fishing (+2.7%) and manufacturing (+1.5%). The water supply index fell 1.4% while electricity & gas supply was down 0.1%.

The department said the PPI for local production by stage of processing rose 2% in January 2017 from December due to  increases in the indices for crude materials for further processing (+3.1%), intermediate materials, supplies and components (+2.1%) and finished goods (+0.4%). 

It said when compared with a year ago, the PPI for local production for January 2017 increased by 10.2%.

This was due to increases in index for crude materials for further processing (+39.1%), intermediate materials, supplies and components (+6.0%) and finished goods (+0.4%).