Rising producer prices: What is going up the fastest

Producer prices rose more sharply in March than at any time since the survey began in 1949. This development shows that consumers not only have to be prepared for further high price increases for heating oil and gas.

After the start of the war in Ukraine, German companies raised their prices at record speed. Producer prices for industrial products rose by an average of 30.9 percent in March compared to March 2021.

According to the Federal Statistical Office, this is the strongest increase “since the survey began in 1949”. In February, the rate of increase was still 25.9 percent. “The current data already reflect the first effects of the war in Ukraine,” say the statisticians.

Important leading indicator for the inflation rate

This is bad news for consumers, who have to brace themselves for persistently high price increases. Experts expect that retailers will “pass on” a larger part of the costs to end consumers, i.e. pass them on.

Producer prices are considered an important leading indicator for the development of consumer prices. They usually encounter far less media interest, which is why they are sometimes referred to as “hidden inflation”. At 7.3 percent, the inflation rate in Germany is currently higher than it has been since 1981.

Heating oil and natural gas with high price increases

The development in energy continues to be primarily responsible for the surge in producer prices. Energy prices in March were 84 percent higher than a year earlier. Natural gas was even 145 percent more expensive, heating oil cost 131 percent more. Excluding energy, producer prices were a total of 14.0 percent above the previous year’s value.

The price increase for food was below average with a plus of 12.2 percent in March. Nevertheless, the prices of individual foods stood out with particularly high rates of increase.

The prices for untreated vegetable oils rose particularly sharply, rising by 72.3 percent compared to the same month last year. Compared to February alone, the increase was 25.6 percent. Butter cost 56.0 percent more than in March 2021. Beef was 31.1 percent more expensive than a year earlier, pork prices were 12.0 percent higher than March 2021 prices.

Coffee was 20.5 percent more expensive. The price increase for the favorite drink of the Germans has accelerated again. In February, the plus was 16.9 percent compared to the same month last year.

Many products are becoming increasingly expensive

There were also high growth rates in producer prices in many other areas, which are likely to lead to a further increase in consumer prices with a delay and in some cases to a lesser extent. Producer prices for furniture in March were 9.4 percent higher than a year earlier. Parts for air conditioners, refrigerators and freezers increased in price by 23.1 percent, paper and cardboard by 45.3 percent and metals by 39.7 percent.

Agriculture also has to cope with strong price increases. Fertilizers cost 87.2 percent more in March than a year earlier and feed for livestock 45.7 percent. The war in the Ukraine had a particularly clear impact here, with a jump in prices between February and March.