Price pressures in the manufacturing and production part of the economic value chain increased last month, with input prices gaining 1% year-on-year.
However, Statistics South Africa’s print, released on Thursday morning, showed that the producer price index (PPI) gained 0.4% month-on-month in February. This is positive news as PPI is the leading indicator for inflation, which is currently at 3.2%
The annualised increase was driven by food products, beverages and tobacco products, which cost 4.2% more month-on-month. Petrol, rubber, and plastic increased the overall hikes in price pressures for producers month-on-month.
The annual percentage change in the PPI for electricity and water was 10.8% in February 2025, compared with 10% in January 2025. This index increased by 1.4% month-on-month.
Electricity will be a further cost driver from April, following the National Energy Regulator of South Africa increasing the cost of electricity for Eskom’s direct consumers by 12.74%. This is, however, lower than the 36.1% increase initially sought by Eskom.
The annual percentage change in the PPI for agriculture, forestry and fishing was 7.6% last month, almost flat month-on-month although price pressures in agriculture increased 8.3% over the period.
S&P Global’s February PPI numbers for South Africa showed an increase to 49 in February 2025, up from 47.4 in January as input cost inflation accelerated to a six-month high due to rising fuel, electricity, and material costs, though wage pressures softened.
The rating agency’s latest research showed that business confidence was still positive as companies expected better sales, product development, and efficiency gains, though concerns over US trade policy softened optimism.
IOL