CSO's latest data on monthly factory gate prices shows that producer prices rose 0.3% in August 2014 m/m and fell 2.0% y/y, moderating a y/y drop of 2.4% recorded in July 2014.
Exports prices rose 0.4% and home sales prices were down 0.3% m/m. However, y/y exports prices are now down 2.1% and home sales prices are down 1.4%.
Noting the effects of European agricultural products trends associated with Russian counter-sanctions, dairy products prices were down 2.4% m/m and meat and meat products prices fell 0.4% m/m. Outside sanctions impact, Beverages prices rose 2.7% y/y, basic pharma products prices fell 4.5% y/y.
Capital goods prices rose 1.3% y/y and 0.3% m/m, while energy prices fell 13% y/y, petroleum fuel prices were down 2.3%.
Given moments in inputs prices and outputs prices, business margins appear to be pressured by: forex valuations (primarily driving exports prices changes to the downside) and by ongoing domestic deflation in the private sectors. Margins were supported by some decreases in the inputs costs (energy) and offset by the increases in prices of capital goods.
Chart below shows the overall downward trend in producer prices for manufacturing sectors that has been established now from roughly Q3 2012.
But never mind the above... all is rosy based on Irish PMIs readings...