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Steel production at Thyssenkrupp: Producers increase prices significantly
Photo: SeanGallup/Getty Images
And again, expensive energy was the main driver: producer prices for commercial products rose by an average of 25 percent in January.
"This was the strongest increase compared to the same month of the previous year since the survey began in 1949," said the Federal Statistical Office.
In December, the value was still 24.2 percent.
Even the expectations of analysts were exceeded - they had expected growth of 24.4 percent on average.
According to the statisticians, energy prices continue to be primarily responsible for the development.
Natural gas, electricity and oil were 66.7 percent more expensive in January than a year earlier.
Compared to December, energy prices rose by 1.3 percent.
Natural gas rose particularly sharply, at an annual rate of 119 percent.
Excluding energy, producer prices were a total of 12 percent higher than the previous year.
There were also high price increases for intermediate goods such as metals (plus 36.9 percent) and in particular for secondary raw materials made of paper and cardboard (plus 72.7 percent), fertilizers and nitrogen compounds (plus 67.4 percent) and packaging materials made of wood (plus 65, 7 percent).
The increases are the result of increasing demand with sometimes severely limited supply due to considerable tensions in world trade.
The development indicates that consumers, too, will have to adjust to persistently high price increases.
"It can be assumed that retailers will pass on at least part of this to end consumers," said economist Jens-Oliver Niklasch from LBBW.
"The question is how big this part will be."
Producer prices are considered a precursor to the development of inflation.
In the statistics, the prices are listed from the factory gate – even before the products are further processed or sold.
They can thus give an early indication of the future development of consumer prices.
Experts expect high inflation rates in 2022
The producer prices are included in the consumer prices, on which the European Central Bank (ECB) bases its monetary policy.
Inflation in both Germany and the eurozone is currently well above the ECB's target of two percent.
So far, the central bank is sticking to its course with interest rates at record lows and bond purchases worth billions.
However, after the most recent monetary policy meeting in early February, ECB President Christine Lagarde admitted that central bankers were also becoming concerned about unexpectedly high inflation rates.
The Governing Council of the ECB plans to reassess the situation at its next meeting on March 10 on the basis of new data.
Many economists are now expecting the ECB to raise interest rates in the euro area this year.
The Ifo Institute expects an average inflation rate of four percent in the current year - it would be the highest since 1993 and again significantly more than 2021 with 3.1 percent.
According to experts, the sharp rise in prices could dampen the economic recovery.
“While there are some minor signs of an expansion in production capacity, a combination of supply chain bottlenecks and rising energy costs are driving sales prices higher,” said Thomas Rinn of consulting firm Accenture.
“It creates significant arrears, all of which is hampering economic recovery.”
mmq/Reuters/dpa
