China’s producer price index (PPI) jumped 9% in May from the same month a year ago, the country’s National Bureau of Statistics (NBS) said Wednesday.

The index, which is an important measure of production costs, in May marked its fastest monthly increase in 13 years – September 2008, when it jumped 9.1%.

The market estimate for last month’s PPI was an increase of 8.5%, after rising 6.8% in April. The index had declined 3.7% in May 2020 during the early months of the coronavirus pandemic.

Much of the increase in PPI is attributed to rising commodity prices and shipping costs due to higher oil prices.

Prices in the iron and metal sectors soared 38% year-over-year in China last month, while prices in the coal mining industry jumped 30%, according to NBS data.

The rise in PPI is significant since it shows a price increase in raw materials in the world’s largest manufacturing and exporting country, which may have an impact on the global economy.

China accounted for 28.7% of global manufacturing output in 2019, more than 10 percentage points ahead of the US, according to the UN Statistics Division.

While China’s trade surplus in 2019 was around $422 billion, its exports of goods totaled a record high $2.5 trillion that year, the last before the pandemic took hold.

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