November 22, 2023

According to the Federal Statistical Office (Destatis), Germany’s producer prices for industrial products fell 11.0% in October 2023 relative to October 2022, down 0.1% compared to September 2023. The year-on-year change rate in September 2023 (-14.7%) was the greatest year-on-year fall since 1949, mainly due to a base effect from the previous year’s extremely high price level. The war in Ukraine led to the highest producer price rise of 45.8% year on year in August and September 2022 then the annual growth slowed slightly in October 2022 to 34.5%.

The main contributor to the year-on-year decline in producer prices was lower energy prices. Intermediate goods were also less expensive than in October 2022, while higher prices were required for consumer and capital goods.

In October 2023, energy prices decreased by 27.9% compared to October 2022, a slight drop of 0.1% compared to September 2023. The decrease was primarily due to lower electricity prices, which declined by 36.2% across all customer groups relative to October 2022. Natural gas (distribution) prices decreased by 29.6% across all customer groups compared to October 2022, up 1.4% from September 2023. Mineral oil products cost 13.2% less compared to October 2022. Light heating oil prices decreased by 22.3% relative to a year ago, and motor fuel prices were 12.8% lower for the same period. Producer prices excluding energy prices were up 0.2% relative to October 2022 but down 0.2% from September 2023.

Intermediate goods prices were 4.6% lower in October 2023 than the prior year, and 0.2% lower than the prior month. The decline was primarily due to price changes for metals and basic chemicals. Metal prices fell 11.7% from October 2022, while basic iron, steel, and ferro-alloys were 18.9% less expensive. The prices of concrete reinforcing bars fell 30.9% year on year and basic chemicals (total) were 12.1% less expensive than in October 2022. Fertilizers and nitrogen compounds experienced a very large decrease in prices of 45.4%, while wood prices were 17.9% lower relative to October 2022 and prepared feeds for farm animals were 22.3% less expensive. However, large price increases were registered for: ready-mixed concrete (+24.7%), cement (+22.0%), lime and plaster (+19.9%) and hollow glass (+17.5%). Gravel for construction and natural sands were 17.1% more expensive.

Non-durable consumer goods prices were 3.9% higher in October 2023 than in October 2022, but 0.2% lower than in September 2023. Food prices were 3.7% higher relative to October 2022, but down 0.3% from September 2023. Processed potatoes were 29.4% more expensive than in October 2022, while preserved fruit and vegetables prices increased by 16.0% year over year and pork cost 10.4% more than a year earlier. Crude vegetable oil prices decreased by 34.1% and butter prices dropped by 29.5%. Processed liquid milk was 8.8% less expensive than in October 2022, and coffee was 4.6% less expensive.

Durable consumer goods prices rose by 4.2% year on year in October 2023, mainly due to price increases for furniture (+4.8%), a 0.2% increase relative to September 2023. Capital goods prices rose by 4.4%, mainly driven by increases in machinery prices (+5.4%) and motor vehicles, trailers, and semi-trailers (+3.9%).

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