While consumer prices in Germany continue to rise sharply, producer prices for industrial products have now fallen. In July they fell by an average of six percent compared to the previous year.
From fertilizer to food to cars and machines: all of this counts in the shopping basket of commercial products. According to figures from the Federal Statistical Office, producers of such goods demanded an average of 6.0 percent less in July than a year earlier.
Producer prices last fell in November 2020. According to the authority, there was a higher decline compared to the same month last year as a result of the financial and economic crisis in October 2009.
Lower energy prices ensure relaxation
The statisticians justify the decline mainly with the fallen energy prices. It cost 19.3 percent less in July than in the same month last year. The cost of electricity, for example, fell by 30 percent in July within a year. Petroleum products were 16.6 percent cheaper: a base effect that is clearly reflected in the numbers.
Disregarding energy costs, producer prices rose by two percent in July over the year. This shows that the decline in prices is not evident in all sectors. According to the information, food in particular increased in price in July, by an average of 9.2 percent. For example, pork, processed potatoes, and fruit and vegetable products cost significantly more in July than in the previous year.
Important harbinger of inflation rate
Producer prices are regarded as a leading indicator for the development of consumer prices. Although the inflation rate has recently fallen, according to an initial estimate by the Federal Statistical Office, it was still 6.2 percent in July – and thus further above the target of the European Central Bank, which is around two percent.
With information from Sebastian Schreiber, ARD finance department.