Manufacturers experience welcome fall in input prices
News Article - 19 September 2011
Category:
Business
The prices paid by UK manufacturers dropped by its biggest
amount in more than two years last month, official figures have
revealed.
Decreasing inflation figures have been attributed as a defining
factor in August's price decline, along with the falling price of
crude oil.
Input prices for manufacturers fell by 1.9 per cent compared to
just 5 per cent in July. Although the news will act as great
encouragement to the sector, the prices manufacturers charged their
customers only increased by a slender 0.1 per cent.
According to the Office of National
Statistics (ONS), the rise in output prices was also due to an
increase in the price of chemicals and pharmaceuticals.
The slowdown will be of some comfort to the Bank of England as
it aims to curb the rate of consumer price index (CPI) inflation.
The Bank's Monetary Policy Committee has revealed it hopes the cost
of living will begin to fall throughout 2012 and into 2013.
The weaker figures will also be of significant relief to
consumers who will hope the reduction of manufacturing costs will
halt the biggest squeeze on household spending since the 1920s.
Samuel Tombs, UK economist at Capital Economics, said: "August's
producer prices figures provide the strongest indication yet that
cost pressures in the industrial sector have peaked.
"Barring a renewed surge in oil prices, input price inflation
should fall rapidly over the coming months and be back down to
single-digits by the end of the year."
Manufacturing businesses increasingly have to evolve within the
rapidly changing industrial environment. Manufacturing
business systems can help minimise waste and maximise
profitability whilst offering control throughout the manufacturing
process.
Manufacturers are often attracted to the ability to adopt tight
integration across their entire system, from stock and works orders
to sales and purchasing - everything under one umbrella.
Article keywords:
UK manufacturers, input prices, inflation figures, ONS, Bank of England, Monetary Policy Committee, Capital Economics, manufacturing business systems, integrated software
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