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Germany’s producer price inflation has eased to 7.5%, the lowest level in 22 months


Producer prices of industrial products in Germany (domestic market), March 2023
+7.5% on the same month a year earlier (preliminary)
–2.6% on the previous month (preliminary)

As reported by the Federal Statistical Office (Destatis) referring to preliminary results, the index of producer prices for industrial products increased by 7.5% compared to March 2022. In February 2023 the increase had been +15.8%. Compared with the preceding month February 2023 the overall index decreased by 2.6% in March 2023, which means a decrease for the sixth month in a row.

The results of the survey on producer prices are preliminary with regard to the overall index, the main industrial group energy and the indices on electricity and natural gas (distribution). The reason is the price brake on electricity and natural gas which is valid from January 2023 has to be realised only starting in March 2023. As not all reporting units on electricity and natural gas prices could report prices taking into account the price brake the March results remain also preliminary. Hence the revision of the figures has to be postponed to the publication of the results of April.

Mainly responsible for the increase of producer prices compared to March 2022 still was the price increase of energy, due to the high weighting percentage combined with exceptionally high changes. Moreover, prices also rose significantly, in parts due to the price development for energy products, for non-durable consumer goods, intermediate goods, durable consumer goods and capital goods.

Also for the decrease of producer prices on a monthly basis the development of energy prices is the main reason.

Further increase of energy prices in comparison with March 2022, but month-on-month decrease

Energy prices as a whole were up 6.8% compared to March 2022. These prices had strongly increased already in March 2022. Together with the price decrease of the latest months this leads to only a comparatively moderate increase compared to the previous year in March 2023. Mainly responsible for the rise of energy prices still were the price increases of natural gas (distribution).

Natural gas prices (distribution) were up 19.1% on March 2022. Electricity prices across all customer groups left unchanged compared to March 2022.

Prices of mineral oil products were down 18.4% from March 2022 and decreased by 2.3% from February 2023. In March 2022 prices of mineral oil products had increased by 25.8% within a month due to the outbreak of war in Ukraine. In March 2023 light heating oil prices decreased by 33.6% compared to March 2022 (–4.4% on February 2023), those of motor fuels were down 19.4% (–1.7% on February 2023).

The overall index disregarding energy was 7.9% up on March 2022 (+0.2% compared to February 2023).

Growth in prices of non-durable consumer goods mainly due to increasing food prices

Prices of non-durable consumer goods increased by 15.4% compared to March 2022 and rose by 0.7% compared to February 2023. From March 2022 to March 2023 food prices increased by 19.2%. Especially high was the price increase of sugar (+89.2% compared to March 2022). Prices of processed and preserved potatoes rose by 46.6%, of meat of swine by 33.4% compared to March 2022. Margarine and similar edible fats prices were up 29.3%.

Cheaper than a year before were butter (–11.6%) and crude vegetable oils (–31.0%).

Prices of durable consumer goods increased by 10.0% compared to March 2022, mainly caused by the price development of furniture (+11.7%).

Capital goods’ prices rose by 7.5% (+0.2% compared to February 2023). The highest impact on the price development of capital goods compared to the previous year had the increase of machine prices, which were up 9.4%, followed by vehicles’ price development by +5.9%.

Price increase for intermediate goods especially due to prices for glass, ceramics and processed stones

Prices of intermediate goods increased by 4.7% compared to March 2022. Compared to February 2023 these prices fell slightly by 0.1 %. The price increase compared to March 2022 was largely attributable to the price development of glass, ceramics and processed stones which was up 24.1%.

Especially high was the price increase of cement (+52.3% on March 2022). Wood chips prices increased by 30.7% from March 2022 (-4.6% on February 2023). Prices of household and sanitary goods and toilet requisites were up 27.8%.

Cheaper than a year before were metal prices (-3.6%). Compared to February 2023 these prices fell by 1.0%. Prices of metallic steel and ferro-alloys decreased by 9.3% compared to March 2022. Prices of concrete reinforcing bars in bars or coils even fell by 24.5%.

Significantly down compared to March 2022 were the prices of non-metallic secondary raw materials (–43.7%).

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