Industrial Producer Prices in China Show Mixed Trends in September 2023

Introduction:

Data released by the National Bureau of Statistics on October 13th reveals the performance of industrial producer prices in China for the month of September 2023. The report highlights a year-on-year decrease of 2.5% in factory gate prices, accompanied by a 0.4% month-on-month increase. Meanwhile, producer purchasing prices experienced a year-on-year decline of 3.6%, with a month-on-month rise of 0.6%. Notably, the chemical raw materials and chemical products manufacturing industry witnessed a 2.0% increase in prices compared to the previous month but a 7.1% decline compared to the same period last year.

Year-on-Year Changes in Industrial Producer Prices for September:

Factory Gate Prices:
Within the overall industrial producer prices, the prices of production materials decreased by 3.0%, contributing to a decline of approximately 2.45 percentage points in the overall level of factory gate prices. This decline was predominantly driven by a 7.4% drop in prices within the mining industry, as well as a 2.8% decrease in prices for raw materials and processing industries. On the other hand, prices for consumer goods decreased by 0.3%, resulting in an impact of approximately 0.07 percentage points on the overall level of factory gate prices. Notably, food prices decreased by 0.3%, clothing prices increased by 0.8%, general daily necessities increased by 0.7%, and durable consumer goods prices decreased by 1.2%.

Purchasing Prices:
Among industrial producer purchasing prices, prices for chemical raw materials decreased by 7.3%, fuel and power prices dropped by 7.0%, prices for construction materials and non-metallic products declined by 6.6%, agricultural and sideline products prices decreased by 4.2%, and prices for ferrous metal materials declined by 3.4%. However, prices for non-ferrous metal materials and wires increased by 4.2%.

Month-on-Month Changes in Industrial Producer Prices for September:

Factory Gate Prices:
The month-on-month analysis shows a 0.5% increase in production material prices, contributing to an overall rise of approximately 0.37 percentage points in the level of factory gate prices. This increase was driven by a 1.8% rise in prices within the mining industry, a 1.3% increase in prices for raw materials, and a slight 0.1% increase in prices for processing industries. Consumer goods prices rose by 0.1%, resulting in a 0.03 percentage point impact on the overall level of factory gate prices. Specifically, food and clothing prices both increased by 0.2%, general daily necessities increased by 0.1%, and durable consumer goods remained stable.

Purchasing Prices:
Among industrial producer purchasing prices, fuel and power prices increased by 1.8%, chemical raw material prices rose by 1.6%, prices for non-ferrous metal materials and wires increased by 0.9%, and both ferrous metal materials and agricultural and sideline products prices witnessed a 0.4% increase. However, prices for construction materials and non-metallic products experienced a 1.0% decline.

Average for January to September:
On average for the first nine months of the year, factory gate prices decreased by 3.1% compared to the same period the previous year, while producer purchasing prices declined by 3.6%.

Conclusion:
The September 2023 data on industrial producer prices in China reveals a mixed trend, with factory gate prices experiencing a year-on-year decrease but a month-on-month increase. The chemical industry showed signs of recovery with a price increase compared to the previous month. However, the overall average for the year still demonstrates a decline in both factory gate and producer purchasing prices. These figures provide insights into the current state of China's industrial sector and its impact on the broader economy.