Producer price inflation in the United Kingdom has continued to slow down in May 2023. Changes in the prices of goods bought and sold by UK manufacturers, including input and output prices, have experienced a decline in annual growth rates compared to previous months, according to the latest data from the Office for National Statistics.
In May 2023, producer input prices, which represent the costs of materials and fuels purchased by manufacturers, rose by 0.5% compared to the same period last year. This marks a significant decrease from the 4.2% rise recorded in April 2023.
Similarly, producer output prices, which indicate the prices charged by manufacturers for their goods, increased by 2.9% in the year to May 2023. This figure represents a decline from the 5.2% rise observed in the year to April 2023.
The primary contributors to the downward trend in annual input and output inflation rates were the inputs of crude oil and petroleum products. These items exerted the most significant influence on the changes in the overall inflation rates.
Despite the slowdown in annual growth rates, the index levels for both input and output prices have remained relatively stable since June 2022. This suggests a degree of stability in the overall pricing environment for manufacturers.
On a monthly basis, producer input prices experienced a decline of 1.5% in May 2023, while output prices decreased by 0.5% during the same period.
The Producer Price Index (PPI) for input prices has now recorded positive annual growth for 30 consecutive months. However, the rate of growth has been gradually slowing for the past 11 months. The current annual rate of 23.9% is 16.7 percentage points lower than the record high of 24.4% observed in June 2022.
Similarly, the PPI for output prices has seen positive annual growth for 29 consecutive months. However, it has also experienced a deceleration in the past 10 months. The current annual growth rate of 19.6% is down by 16.7 percentage points from its peak in July 2022.
Wood, sawn & planed products maintained a consistent price level in May, with a slight increase of 0.8 points from the previous month, reaching 162.6. Similarly, other Builders' carpentry & joinery products also witnessed stability, showing no significant fluctuations in price throughout May, holding steady at 156.0. Wooden containers experienced a marginal decline in prices during May, with a decrease of 0.7 points compared to the previous month, resulting in a price index of 157.4.
In April, the average price for wood pellets imported to the UK contracted 16% compared to the previous month. The average price for imported plywood grew 13% to $614 per m3, this is still 8% less than it was a year ago.
