Economy, Services, Commodities and Prices-The prices of plywood keep tumbling |26 June 2009

From the small-scale research undertaken, it appears that G.S. Pillay and Company (Pty) Ltd, whose store is based at Providence, is emerging as the leading competitor.

G.S. Pillay’s prices are indeed low in comparison to other traders as it is selling ¾-inch plywood at a price of R415 a sheet and ½-inch at R325. These prices are advertised in the Seychelles Nation this week. 

Earlier this month, it was thought that the Bargain Store, Hermitage, was selling plywood at the cheapest prices when it advertised its new stock.

For instance, the ¾-inch (18mm) cost R635, the ½-inch (12mm) was R480 and the ¼-inch (5.5 mm) was R235.

What were thought to be the lowest prices then are now the expensive ones. G.S. Pillay’s are more competitive. 

If we are to compare the prices, Builders Construction Supplies was previously charging R770 for ¾-inch plywood but now is selling the same for R625. This is a reduction of R145 for a sheet of ¾-inch plywood.

However, if we analyse the prices at the Paoli Shop at Mont Fleuri, it is now selling the same thickness of plywood for R725. This is also a reduction in its price as it was previously selling a sheet of ¾-inch for R745.

The Paoli Shop is now charging R310 more than G.S Pillay is asking – that is indeed a huge gap. That is why customers are always encouraged to shop around before they buy.

The big drop in prices of certain building materials may be attributable to the appreciation of the Seychelles rupee vis-à-vis foreign currencies.

It is not known how much profit the importers are making on these goods, but what is clear is that traders holding old stocks are now facing competition.
 
UK economy worse than thought
 
Fresh figures on the United Kingdom construction industry could mean the UK economy shrank more than had been thought in the first three months of 2009.

The Office for National Statistics (ONS) said that construction output fell by 9% in the first quarter, much more than an initial estimate of 2.4%.

ONS officials said “all things being equal”, this could suggest the economy shrank 2.2% in the first quarter.

Earlier estimates indicated that the UK economy contracted 1.9%.
This was the worst quarterly figure since 1979.

“The plunge in construction output has serious negative repercussions when looking at the overall performance of the economy in the first quarter,” said Howard Archer, an economist at Global Insight.

Meanwhile, the cost of goods leaving factories and the prices of materials bought by firms both fell in the year to May, hinting inflation is continuing to cool.

Output prices fell 0.3% in May from a year earlier, the biggest annual fall since June 2002, the ONS said.

Input costs dropped 9.4% in May from a year earlier as the price of oil and imported metals fell at a record pace.

However, analysts said the recent rise in oil prices could hurt producers.
Jonathan Loynes, chief European economist at Capital Economics, said the rally in crude oil prices, which are now close to $70 a barrel, could hurt manufacturers.

“The recent renewed rise in oil prices, if sustained, obviously raises a few concerns regarding the future path of producers’ costs,” said Mr Loynes.
 
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Crude oil prices
 
As at 25/06/09
 
Nymex Crude Future    68.95 dollars per barrel
 
 
Dated Brent Spot           67.99 dollars per barrel