Status: 09/20/2022 12:16 p.m
Producer prices are used as an indicator for the development of consumer prices. Fueled by high energy costs, prices for commercial products rose by 45.8 percent compared to the same month last year.
Manufacturers of industrial products have charged the highest prices for their products in the past month. Compared to the same month last year, producer prices rose by an average of 45.8 percent in August, as the Federal Statistical Office announced today in Wiesbaden. Compared to the previous month, they increased by 7.9 percent – this is also the highest increase since the survey began in 1949.
The price index had already recorded record increases every month from December to May. Inflation slowed down slightly in June, but picked up sharply again from July.
Consumer price indicator
According to the Federal Statistical Office, the index measures the development of prices for the products produced in Germany in the mining, manufacturing and energy and water industries and sold domestically. The producer prices are considered an indicator for the development of consumer prices, which have already risen significantly as a result of the Ukraine war and the massive increase in energy costs. The inflation rate in Germany was 7.9 percent in August, and the Bundesbank even expects a double-digit inflation rate in the coming months.
The development of producer prices is still being driven by energy costs, which have increased by an average of 139 percent year-on-year. In August, natural gas was 209.4 percent more expensive than a year ago. Power plants even paid 269.1 percent more for natural gas, industrial customers 264.9 percent. Within a year, electricity prices rose by 174.9 percent and petroleum products by 37.0 percent. Compared to the previous month, however, the prices for petroleum products fell by 3.2 percent. Excluding energy, producer prices were 14 percent higher than in August 2021, barely increasing compared to the previous month.
High energy prices as drivers
The high energy prices are also having an impact on intermediate goods (plus 17.5 percent) such as metals and basic chemicals. Durable and consumer goods are also affected by significant price increases (10.9 percent and 16.9 percent). For example, food was 22.3 percent more expensive in August than in the previous year.
There were very high price increases for fertilizers and nitrogen compounds (109 percent higher than in the previous year), mainly because the precursor ammonia became even more expensive. The prices for pellets and briquettes from sawmill by-products have also doubled within a year, with an increase of 108.2 percent. Wood in the form of flakes or chips rose in price by 133 percent. The feed price for livestock also increased by 37.6 percent compared to the previous year. Newsprint cost 92.8 percent more than in August last year, grain flour 46.4 percent.