China’s producer price index fell year-on-year in October 2022 for the first time since December 2020. Here is a furnace at a steel plant in August 2022 in Jiangxi province.
Zhang Yu | Visual China Group | Getty Images
BEIJING – China’s producer price index fell in October for the first time since December 2020, dragged down by falls in iron and steel prices, according to official data released on Wednesday.
The producer price index, which tracks the price of raw materials and other input costs, fell by 1[ads1].3% in October from a year ago. That slightly missed expectations for a 1.5% decline, according to a Reuters poll.
The decline comes from double-digit gains last year when raw material prices rose.
In October, measures for ferrous metals, which include iron and steel, and the coal industry were the strongest decliners within the producer price index.
Changes in China’s producer price index tend to precede similar changes in the U.S. by about one or two months, Francoise Huang, senior economist at Allianz Trade, said in October.
While inflation has risen in the US and Europe, China’s CPI has remained subdued due to weak domestic demand. Strict Covid controls have dragged China’s GDP down to a 3% pace for the year, as of the third quarter.
China’s consumer price index rose 2.1% in October from a year ago, below Reuters’ expectations for a 2.4% increase.
Pork, a staple food in China, saw prices rise by 51.8%, while the price of fruit rose by 12.6%. However, fresh vegetable prices fell by 8.1%, reversing the month’s gains.
Excluding food and energy, the so-called core CPI rose by 0.6% in October – unchanged from the previous month. That had marked the slowest pace since March 2021, according to Wind Information.
China this week reported trade data that showed an unexpected drop in exports last month, dragged down by falling sales of goods to the United States and the European Union. China’s imports also fell, reflecting weak domestic demand.