The Producer Price Index (PPI) comprises of indices for local production, imports and domestic economy. The domestic economy price index is a composite index based on the price data derived from the local production and import price indices.

DOMESTIC ECONOMY

The PPI for domestic economy in December 2014 decreased by 1.9 per cent with the both PPI for local production and import price index were moved down by 2.4 and 0.7 per cent respectively. (Table 1).

Year-on-year comparison showed that the PPI for domestic economy index decreased by 4.4 per cent with local production index dropped by 6.0 per cent. While, the import price index moved down by 0.6 per cent. 

Table 1: Producer Price Index, Malaysia (2005=100)

Graph 1: Producer Price Index –  Domestic Economy, Local Production and Imports, 2009-2014

Graph 2: Producer Price Index (year-on-year) Percentage Change –  Domestic Economy, Local Production and Imports, 2009-2014

IMPORTS

The import price index went down 0.7 per cent in December 2014 as compared to November 2014. The decrease in the overall index was attributed to the lower prices of goods transacted by importers for six (6) commodity sections as classified under SITC 3+. The commodity sections that showed decreases were Mineral fuels, lubricants etc. (-8.5%), Animal and vegetable oils and fats (-0.5%), Crude materials, inedible (-0.2%), Food (-0.1%), Beverages and tobacco (-0.1%) and Chemicals (-0.1%). However, Miscellaneous transactions and commodities increase (+0.7%), Manufactured goods (+0.3%), Miscellaneous manufactured articles (+0.3%) and Machinery and transport equipment (+0.1%) [Table 3].

As compared with the same month of preceding year, the import price index for December 2014 moved down 0.6 per cent to 112.3 from 113.0. The decrease in prices were found in three (3) commodity sections which comprised Mineral fuels, lubricants etc (-11.0%), Animal and vegetable oils and fats decreased (-2.4%) and Crude materials, inedible (-0.3%). In contrast, indices for Food increase (+1.6%), Miscellaneous transactions and commodities (+1.5%), Machinery and transport equipment (+0.6%), Miscellaneous manufactured articles (+0.5%), Manufactured goods (+0.3%) and Beverages and tobacco (+0.2%). Meanwhile, Chemicals remained unchanged at 111.8.

Import Price Index by Stage of Processing

The decrease (-0.7%) in the import price index by stage of processing (SOP) for December 2014 as compared to previous month resulted from the negative change reported by the index for Crude  materials  for  further  processing (-9.7%). In contrast,  index for Finished  goods increase (+0.3%) followed by Intermediate materials supplies and components (+0.2%).

 As compared with December 2013, the import price index by SOP for December 2014 went down by 0.6 per cent. The negative changes for overall index was brought about by the decrease in the indices for Crude materials for further processing 9.2 per cent. However, index for Intermediate materials, supplies and components 0.3 per cent and Finished goods remained unchanged at  108.2.

Table 3: Percentage change of Import price index (2005=100) by comodity section (SITC 3) and stage of processing, Malaysia