But according to van Dyk, hefty rises in steel prices was the main culprit for the "large increase" in PPI.
She said that the double-digit rise in the steel price announced in May - which is approximately 18% across a range of steel products - by a leading steel producer was key to the larger-than-expected increase in the PPI in May.
"The steel price increase, the fourth for 2008, was on the back of rising world steel prices and the rand's relative weakness on a year-to-date basis", she said.
These increases coincided with Statistics SA's quarterly price survey, which led to such a hefty adjustment in the PPI, as basic iron and steel accounts for around 4.12% of the total index, she said.
As such, the basic metals component contributed 3.2 percentage points to the 4.9% month-on-month increase. These developments reflect the vulnerability of producer inflation data to fluctuations in commodity prices, which currently is in a protracted boom phase.
"If excluded, PPI would have eased to 12.2% year-on-year," said van Dyk.
Fin24 article
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