China's producer price index fell 0.8 percent year-on-year in August 2019, following a 0.3 percent decrease in the previous month and compared with market expectations of a 0.9 percent decline. It was the sharpest fall in producer prices since August 2016, as cost of means of production dropped further (-1.3 percent vs -0.7 percent in July), mainly due to raw materials (-3.5 percent vs -2.9 percent), processing (-0.8 percent vs -0.2 percent), and extraction (2.8 percent vs 3.2 percent). Also, prices eased for consumer goods (0.7 percent vs 0.8 percent), of which durable goods (-2 percent vs -1.2 percent), food production (2 percent vs 2.2 percent), clothing (0.9 percent vs 1.3 percent) and daily use goods (0.6 percent vs 0.8 percent). Producer Prices Change in China averaged 1.27 percent from 1995 until 2019, reaching an all time high of 13.47 percent in July of 1995 and a record low of -8.20 percent in July of 2009.
Producer Prices Change in China is expected to be 1.10 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Producer Prices Change in China to stand at 1.80 in 12 months time. In the long-term, the China Producer Prices Change is projected to trend around 1.30 percent in 2020, according to our econometric models.