Stockbroker Gerrard says today's producer price inflation figures are good news for earnings in the ...
Stockbroker Gerrard says today's producer price inflation figures are good news for earnings in the manufacturing sector.
The 0.6% year-on-year increase in manufacturing output prices as measured by the Office for National Statistics is the biggest since March 2001 and may be the "first glimmer of light that some pricing power is returning to the sector".
However, Gerrard also hedges its bets by saying it does not believe the price inflation can be sustained.
The main problem is the state of the global economy, with deflationary pressure still strong and export markets still weak.
Ironically, the one area not experiencing deflation is raw materials, and this is likely to squeeze manufacturers between rising costs and falling output prices, even if the latter are firming.
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