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Producer prices show the highest increase since 1974

2021-10-20T08:40:27.805Z

The producer prices of German producers rose by 14.2 percent in September compared to the previous month - more than they have been in 47 years. Back then, too, prices had skyrocketed because of expensive energy.



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Steel coils in Duisburg: Metals on average 35.5 percent more expensive than in September 2020

Photo: Roland Weihrauch / dpa

At least for companies with decades of history, memories of the first oil price crisis could come up these days.

Because while the inflation rate for consumers is currently "only" 4.1 percent due to the high energy prices, manufacturers are already receiving 14.2 percent more for their products than in the same month last year, according to the Federal Statistical Office.

And producer prices are an indicator of the development of consumer prices.

The current rise in producer prices is the strongest increase since October 1974. As back then, when producer prices shot up by 14.5 percent, it is again the high costs of energy that are responsible for the sharp rise in prices.

Wood and metal are also expensive

This price increase at the manufacturer level has been preoccupying the economy for months.

In August of the current year the rate of increase was already 12.0 percent and in July 10.4 percent.

How much the high costs of energy are responsible for this development can be seen from a look at the price jumps in this area: Energy rose in price by an average of 32.6 percent in September compared to the same month last year.

Natural gas rose particularly sharply - the price rose by 58.9 percent.

But even without taking energy into account, the producer prices increased - plus 8.6 percent compared to September 2020. Specifically, there are still "high price increases for intermediate goods, especially wood, secondary raw materials and metals," said the Federal Office.

The price increases compared to the previous year were particularly high for sawn coniferous timber (117.9 percent), but prices fell slightly compared to August 2021 (minus two percent).

Metals were on average 35.5 percent more expensive than a year earlier.

"As in the past few months, the sharp rise in steel and wood prices is likely to be due in particular to the high demand at home and abroad as well as problems in the supply of raw materials," the Federal Office wrote.

In the case of steel, there have also been strong price increases for iron ore imports in recent months.

The background to the high demand is the global economic recovery after the corona slump.

In some cases, considerable problems in the international trade in goods are also causing shortages.

The Federal Office's index measures the development of prices for products produced in the mining, manufacturing, energy and water industries in Germany and sold domestically.

apr / dpa / AFP

Source: spiegel

All business articles on 2021-10-20

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