Producer Price inflation has risen at almost double the rate forecast by the market in the March quarter, a foretaste of what we can expect from Wednesday’s Consumer Price Index figures.

The Australian Bureau of Statistics said the Producer prices at the final stage were up 1.9% in the March quarter, compared to the market estimate of 1.0% and a top estimate of 1.4%.

For the year to June they were up a very solid 4.8% as the surge in the cost of energy and also other commodities drove much of the pressure.

The ABS said that was the biggest rise in the final series PPI since the series started 10 years ago, in 1998; so the inflationary pressures in the economy are substantial, something that might come as a surprise to Malcolm Turnbull, the Opposition’s Treasury Spokesman, who still insists there was no real inflationary pressures in 2007. His advisors at Sydney’s Daily Telegraph may also get a shock.

The figure is triple the 0.6% rise in the PPI at the final stage in the December quarter when import costs were held down by a strong Australian dollar.

The ABS said that in the March quarter, the PPI at the final stage rose 2% for domestic costs and 0.6% for imports. In the year to March though domestic costs were up a sharp 6.1% and imports off minus 3.8% because of the negative impact of the stronger Aussie dollar late last year.

At the intermediate stage the PPI was up 2% in the quarter and 65% over the year, and at the preliminary stage it was up 2.3% and 6.9%, so strong price pressures in all stages, moderating slightly at the final stage where goods are sold on into the wider economy.

Although there’s no strict correlation between the PPI and the CPI, we can see the strong pressures being exerted by domestic price pressures in parts of the economy, and the strength of the rise in commodity costs. In the preliminary stage the cost of imports jumped 4.9% in the quarter and 12% for the year as the rise in oil, wheat, gold and copper prices burst through the moderating effect of the higher Australian dollar.

The ABS said the rise in the final stage PPI was due mainly to price increases in building construction (+1.9%), petroleum refining (+10.5%) and electricity, gas and water (+3.1%) and price falls in the cost of in electronic equipment manufacturing (-2.9%).

These come on top of the release on Friday of the Import and Export Indexes for the March quarter. They showed a slight improvement in terms of trade in the quarter with the Index for exports rising 3.5%, the fastest increase for over 18 months and the price index for imports rising a solid 2.7%. That was the fastest growth in import costs for almost four years, something which emerged in today’s PPI.

The ABS said the oil goods price component of the import trade price index soared 11% in the three months to March, to be a staggering 46.5% higher than a year earlier.