Wood on a freight wagon: high demand, short supply
Photo: Robert Schmiegel / imago images / Future Image
The prices of German manufacturers are currently rising faster than they have been since 1951, primarily due to expensive energy.
The producer prices of commercial products climbed in October by 18.4 percent compared to the same month last year and thus continue to shimmy from record to record, as the Federal Statistical Office announced.
The increases are already stronger than in the first oil crisis in 1974. "That was once again significantly above the worst fears," said LBBW expert Jens-Oliver Niklasch. Economists polled by Reuters had only expected 16.2 percent, after the rate of increase in September was 14.2 percent. In addition to energy, primary products such as wood and steel became more expensive.
The producer prices are considered to be a leading indicator for the development of inflation.
In the statistics, the prices are kept from the factory gate - i.e. before the products are further processed or go on sale.
You can use it to give an early indication of the development of consumer prices.
At 4.5 percent, the inflation rate is currently higher than it has been since 1993 and, according to economists, could move towards five percent by the end of the year.
Inflation at the consumer price level is unlikely to fall as quickly as the European Central Bank (ECB) currently expects, said LBBW analyst Niklasch.
He assumes that the companies will pass on at least part of the resulting costs to the end consumer.
"Inflation should therefore remain a dominant topic in 2022."
The statisticians explained: "The main reason for the increase in commercial producer prices compared to October 2020 was the price trend for energy." It rose by an average of 48.2 percent, compared with the previous month by a good twelve percent.
If energy is excluded, the total producer prices were only 9.2 percent above the previous year.
mic / Reuters