PPI Components Diverge in March

  • The Statistical Institute of Jamaica reported a divergence in producer price movements across key sectors in March 2026. The Producer Price Index (PPI) for the Mining & Quarrying industry declined by 0.9%, while the Manufacturing index recorded a 3.1% increase.
  • The contraction in Mining & Quarrying was primarily driven by a 0.9% decline in the dominant ‘Bauxite Mining & Alumina Processing’ segment, alongside a marginal 0.2% reduction in ‘Other Mining & Quarrying’.
  • Conversely, the expansion in Manufacturing was supported by price increases in ‘Food, Beverages & Tobacco’ (+0.3%) and a sharp uptick in ‘Refined Petroleum Products’ (+16.0%), the latter being the principal contributor to overall sectoral growth.
  • For the period March 2025 to March 2026, the point-to-point (P2P) producer price index for the Mining & Quarrying industry contracted significantly by 31.7%, reflecting a steep 33.1% decline in ‘Bauxite Mining & Alumina Processing’. In contrast, the P2P index for Manufacturing rose by 5.6% over the same period, underpinned by gains in ‘Food, Beverages & Tobacco’ (+3.1%) and ‘Refined Petroleum Products’ (+16.4%).
  • The global bauxite market is currently experiencing significant oversupply, largely driven by record exports from Guinea, the world’s largest exporter of bauxite. Guinea’s bauxite output jumped by 25% in the first quarter of 2026, which has led to a nearly 50% drop in prices since January 2025. The PPI is likely to remain influenced by the further surplus in 2026, which could continue to weigh on prices in the Mining & Quarrying sector as demand for bauxite and alumina levels off, given China’s strict national ceiling of 45 million tons on primarily aluminium production. That said, the Guinean government has intervened by implementing export restrictions, which could offset these declines.
  • In contrast, the Manufacturing index may continue to experience upward pressure, with the crude price surging past US$100/bbl as tensions in the Middle East intensify. Furthermore, Liquefied Natural Gas (LNG), which accounts for 70% of local power generation, has seen prices climb by 33.0% since the onset of the conflict. The resulting increase in energy costs is likely to feed directly into manufacturing expenses through higher production costs, with further volatility expected.

(Sources: STATIN, Reuters, & NCBCM Research)