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Energy drives German producer inflation to 6.7 per cent

German industrial producer prices rose 6.7 per cent in September from a year earlier, their fastest increase since March 2023. Energy prices were the main driver, while intermediate goods also became dearer. Excluding energy, the annual rise was 3.2 per cent. Food producer prices fell, leaving substantial differences across the prices manufacturers receive for goods sold domestically.

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Steel coils in a German factory yard, with insulated pipes and an electrical substation behind them and a German flag by the open gate.

Producer prices rise fastest since March 2023

Germany’s producer prices for industrial goods sold domestically rose 6.7 per cent in September from a year earlier and 1.9 per cent from August. The annual increase was the largest since March 2023, when it had been 7.5 per cent. Destatis attributed the rise primarily to higher energy prices.[1], [2]

Excluding energy, prices increased 3.2 per cent annually and 0.1 per cent monthly. The index published by Destatis, Germany’s federal statistical office, measures domestic producer selling prices and excludes value-added tax. It covers prices received before goods reach the retail stage.[1]

Energy and intermediate goods become dearer

Energy prices rose 14.9 per cent over the year and 5.8 per cent from August. Petroleum products increased 51.3 per cent annually, with light heating oil up 91.8 per cent. Natural gas distribution prices rose 15.0 per cent and electricity 8.2 per cent. Intermediate goods increased 6.4 per cent annually, including a 14.0 per cent rise for metals.[1]

Food producer prices move lower

Capital goods prices were 2.4 per cent higher annually and durable consumer goods 2.2 per cent higher. Non-durable consumer goods instead fell 1.8 per cent. Food producer prices declined 4.1 per cent, with butter down 34.8 per cent, pork 13.9 per cent and beef 9.9 per cent. Vegetable oils increased 14.5 per cent and sugar 4.1 per cent.[1]

References

  1. News sourceDestatisGerman producer prices rise 6.7 percent annually in September↩1↩2↩3↩4
  2. News sourceTrading EconomicsGerman producer inflation reaches its highest in three and a half years↩
Central banks and the rate cycleEnergy transition and climate

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