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9 April 2011 | Angeline Albert
Manufacturers’ input costs for March were 3.7 per cent higher than in February and have leapt by 14.6 per cent when compared to a year earlier.
Prices climbed from 161.6 in February to 167.5 last month, against a base figure of 100 set in 2005.
According to the UK producer price index, published yesterday by the Office for National Statistics, the increase was chiefly the result of the soaring cost of crude oil – which has risen by 34.3 per cent in the past 12 months. Between February and March, the cost of imported materials as a whole rose by 3.4 per cent.
In addition, the prices charged by manufacturers for their goods - the output price index - went up by 5.4 per cent in the year to March.
Due to increases in the price of diesel, gas oil and unleaded petrol, petroleum product output prices rose 3.9 per cent, when compared to the previous month.
Alcohol and food costs also rose between February and March, due to increases in the price of dairy, bakery and meat products.
Chris Williamson, chief economist at research firm Markit said the figures were more awful news for UK manufacturing. “The factory gate price data tally with the Markit/CIPS PMI data, which showed a record increase in March. Worse may be yet to come, as oil prices have since hit a record high in sterling terms and supply chain disruptions from the Japanese earthquake could also drive up prices for certain highly sought-after components.
“Coming on the back of the manufacturing output data earlier this week, which showed no growth in February, the manufacturing sector is clearly in dire straits,” Williamson said.