NSO indices beg explanations from government and MRA

The protest march against the hike in utility tariffs organised by a number of trade unions did not lead anywhere at all. The government ignored it, other than by trying to make political capital out of it by alleging that the protest was an invention of the opposition and that the unions that had taken part in it thereby became the handmaidens of the Labour Party.

Some of the people who took part in the protest did a great disservice to the trade union organisers by booing and calling out names at the Prime Minister, his Cabinet team and their backbenchers. John Bencini, of the teachers' union, spoke out against that thoroughly bad show of manners and lack of understanding of what a real protest walk is all about. He immediately disowned the hecklers.

There were 40 or 50 of them, claimed Mr Bencini, putting the ugly incident in the perspective of the many thousands who took part in the protest walk. At the same time he distanced himself from any further militancy. (The majority in) Parliament had spoken, voting in favour of the retention of the increased tariffs, he said. There was not anything more the unions could do about it.

It remains to be seen whether main protest union, the GWU, will agree with that. Meanwhile the Labour opposition spokesperson on energy announced he was instituting legal proceedings against the Malta Resources Authority, the energy regulator. He would be doing so in a personal capacity, he said, but made it clear he was offering himself as a symbol of those who totally disagreed with the way utility tariffs had been raised. The purpose of the action is evident - the opposition has every intention of keeping the utility tariffs issue alive.

Whether that requires legal or further protest action is another matter. Left to itself and distanced from trade unionism or politics, the issue remains very much alive in the economic sector. Proof of this has been provided by the National Office of Statistics.

One no longer has to wait for months for economic indicators and other data to be published by the NSO, though the end-year public finance figures do take some weeks because of statutory requirements. Nowadays provisional figures of various indicators are published only days after the end of each month. On February 22 the NSO published the Industrial Producer Indices for January. Those who love to plough through figures have interesting tables full of them to delve into. The NSO also provides a succinct narrative of month-to-month year-to-year comparisons for those who do not have time or aptitude to pass the many figures through their wringer. The summary accompanying this particular media release was illuminating regarding the effect of the January utility tariffs jump on our industrial competitiveness.

The January producer index for total industry jumped by 3.8 per cent (over December 2009), showed the media release, "primarily due to a 22.4 per cent increase in energy prices between the two months".

There you have the first of a short but telling blow-by-blow account. The increase, any analyst will tell you, was home-baked, though as an indirect result of imported fuel. In fact the direct import content was low - consumer prices rose by 0.3 per cent "on account of a 1.1 per cent increase in prices for non-durable consumer goods". A marginal (0.2 per cent) price increase was registered for capital goods. Prices of (also imported) intermediate goods actually fell, by 3.1 per cent.

The spike in the producer price index will be carried forward - remain there - throughout the year. So will the 17.3 per cent increase in producer prices for the domestic market, "mainly reflecting the rise in prices for energy", according to the NSO media release. Interestingly, prices for the non-domestic market fell by 2.8 per cent due to a drop in prices of goods destined for the euro area. Prices of goods sold to the non-euro area rose slightly, by 0.4 per cent.

In other words industrial producers were able to pass higher energy costs to domestic consumers, but mostly absorbed them - no doubt at the cost of their profitability - when it came to exports.

The year-to-year story (January 2010 over a year ago) offers similar conclusions. Total industry producer prices fell by 3.3 per cent due to lower intermediate, capital and consumer goods prices. But such declines were partly offset by an increase of five per cent in energy prices. The latter bit of information, that energy prices in January were five per cent higher than a year previously, calls for clarification. The energy prices in January last year were those set in October 2008. The hike in tariffs in January this year was supposed to bring their level back to that of October 2008. Not so, according to the breakdown of the Industrial Producer Price Indices for January 2010. Business people will feel that both the government and the Malta Resources Authority have some explaining to do.