Factory Prices Rise

Prices of goods produced by manufacturers surged for the second consecutive month in the year mainly due to sharp increases in electricity and water tariffs and to some extent manufacturing products.

This means utility bills for commercial entities inched up in February 2011 though the Public Utilities Regulatory Commission (PURC) announced marginal reduction in electricity and water bills last week.

The PURC earlier announced plans to review utility tariffs quarterly.

Indeed, the increase in petroleum prices at the beginning of the year has impacted both electricity and water bills since the turbines are being powered by fuel.

According to February data released by the Ghana Statistical Service (GSS) yesterday, the Producer Price Index (PPI), which measures the average change over time in the prices received by domestic producers for the production for goods and services, increased by 1.47 percent, which is higher than the figure for January 2011.

The PPI recorded 22.32 percent in February 2011, as against 20.85 percent in January 2011.

According to GSS, utilities including production, transmission and distribution of electricity as well as collection, purification and distribution of water, recorded the highest inflation rate of 71.89 percent in February 2011 compared to 71.81 percent.

Manufacturing, the largest industrial sub-sector with 69.75 percent share of all industry, recorded an inflation rate of 11.18 percent as against 11.41 percent.

Six out of the 16 major groups in the manufacturing sector recorded inflation rates higher than the manufacturing sector average.

Manufacture of electrical machinery and apparatus recorded the highest inflation rate of 47.71 percent while manufacture of wood and of wood products and cork recorded negative inflation rate of 0.98 percent respectively.

Mining and quarrying, with 13.97 percent share of all industry, recorded an inflation rate of 27.94, which is higher than the January figure.

Mining of metal ores and non-ferrous metal ores, except uranium and thorium ores, recorded inflation rates above the national average.

With regard to Petroleum Price Index, inflation in the petroleum industry increased to 25.63 percent in February 2011.

During the 12-month period, that is February 2010 to February 2011, the all industry recorded the highest inflation rate in February 2011.

Between February 2010 and May 2010, the rate declined but increased in June 2010.

Thereafter, the rates were quite stable until November 2010. The rates have been rising steadily since December 2010.