Namibia's PPI shows mixed trends

The Producer Price Index (PPI) declined both on a quarter-on-quarter and year-on-year basis, indicating a softening of the prices for producing goods and services, as noted by the Namibia Statistics Agency (NSA).

The PPI measures the average change over time in the selling prices received by domestic producers for their output, reflecting how much producers are charging for goods and services before they reach consumers.

“In the third quarter of 2024, the overall Producer Price Index (PPI) for production showed a moderate decrease both quarter-on-quarter (q/q) (-1%) and year-on-year (y/y) (-0.7%). This suggests that the overall production sector experienced a slight contraction in pricing, although the decline is not significant,” the NSA said.



Mining

According to the NSA, the mining and quarrying PPI reported a 1.5% decline from the second quarter of 2024 to the third quarter of 2024, dropping from 101.5 to 100.

“This is mainly due to the moderate reduction in uranium prices (-1.2%) and the steep decline in salt prices (-16.2%),” the NSA explained.

“Compared to the third quarter of 2023, when it stood at 93, the PPI grew by 7.4% year-on-year (y/y). The sector's y/y growth was largely driven by strong results in gold (27.8%) and uranium (26%),” it added.

The poor performance of the diamond sub-sector was not sufficient to hinder the overall growth of the mining and quarrying industry.

“Despite diamonds’ poorer performance (-8.5%), these commodities contributed to the continued positive annual growth trend in the mining and quarrying industry,” the NSA noted.



Manufacturing sector softens

In the third quarter of 2024, the NSA observed that the manufacturing PPI dropped by 0.1% compared to the second quarter of 2024, decreasing from 104.1 to 104.

“This was primarily driven by declines in the manufacture of other non-metallic mineral products, such as cement (-14.1%), cutting and polishing of diamonds (-2.7%), and a modest reduction in meat processing (-2%),” the NSA explained.

In contrast, notable increases were observed in the manufacture of dairy products (40.0%), rubber and plastic products (27.8%), and fish processing on shore (13.1%) during the same period.

In Q3 2024, the electricity generation and supply PPI remained unchanged at 100, showing no growth compared to the second quarter of 2024. On a y/y basis, the PPI also showed no change, with a 0.0% increase compared to Q3 2023, when it stood at 100.

In the third quarter of 2023, the water supply sector showed moderate growth in both q/q and y/y terms (0.7%). This signals mild price adjustments rather than significant fluctuations, indicating stability within the sector.



Final analysis

“The analysis of the PPI for the third quarter of 2024 reveals mixed results across various sectors.

"While mining and quarrying experienced growth on a year-on-year basis, there was a slight contraction in quarter-on-quarter performance, driven by declines in certain commodities like salt and uranium,” the NSA concluded.

“Manufacturing, on the other hand, showed modest price reductions overall, but significant price increases were observed in sub-sectors such as dairy products, rubber and plastic products, and fish processing. In contrast, the electricity generation and supply sector remained stable, while the water supply sector saw mild price increases,” the NSA added.

Overall, while there were some sector-specific price increases, the broader PPI trend for the third quarter of 2024 points to modest price contractions compared to both the previous quarter and the same period in the previous year.

According to the NSA, these findings indicate that while inflationary pressures are easing in some sectors, other areas continue to experience fluctuations, highlighting the complex dynamics within the Namibian economy.