Prices at manufacturer level continue to fall sharply in Germany, although with a somewhat downward trend. In October, producer prices fell by 11 percent year-on-year, as the Federal Statistical Office announced on Monday. In the previous month, at 14.7 percent, there was the sharpest decline since the surveys began in 1949.
A statistical base effect is still at work: last year, the prices that manufacturers received for their goods rose at a record rate of 45.8 percent. The main reason was Russia’s war against Ukraine, which made energy and many raw materials more expensive. Prices have now fallen again, which is also depressing inflation at the company level.
Energy, but also intermediate goods, was once again crucial for the sharp decline in producer prices. Energy was 27.9 percent cheaper than a year before. Consumer goods were more expensive than a year earlier, especially food.
The producer prices capture the price pressure at the manufacturer level by reflecting the producers’ sales prices. The development also affects consumer prices, which the European Central Bank bases its monetary policy on. Because of inflation, the ECB has significantly raised its key interest rates. (dpa)