Marginal change likely in wholesale prices

Only a marginal change if any is expected in annual wholesale prices this year.

Latest CSO data, published yesterday, shows that monthly factory gate prices — the basic cost of manufacturing goods prior to any mark-up to generate profit — generated 0% movement in August, having risen by 0.7% in July (June and January being the only months, to date, this year to have shown monthly declines).

However, on a year-on-year basis, August’s Wholesale Price Index showed a 1.2% drop in manufacturing output prices. August of 2012 saw a monthly increase of 1%. The latter drop followed a 0.2% annualised decline in July, with June the last month to see a year-on-year increase.

August’s monthly showing was expected to register a slight increase, but overall outlook for the year remains unchanged, with movement of around 0.5% likely.

The most significant monthly changes were increases in dairy products; computer, electronic and optical products and beverages. Dairy, beverages and meat products also contributed to the annualised percentage decline.

“I think the outturn — a bit like Ireland’s GDP for 2013 — will be in the -0.5% to +0.5% range. In other words, there will only be a marginal change in whichever direction on 2012,” Alan McQuaid, chief economist with Merrion Stockbrokers, said.