German manufacturing production prices fell another 11% in October 2023
According to data released by the Federal Statistical Office on November 20, in October 2023, the ex-factory price of German industrial products (Erzeugerpreise gewerblicher Produkte) fell by 0.1% from the previous month, and fell by 11% compared with the same month of the previous year (October 2022).
The Bureau of Statistics pointed out that the index fell by 14.7% year-on-year in September, the largest decline since the survey began in 1949, and continued to decline in October. This development was mainly due to the base effect caused by very high price levels in the previous year. In August and September 2022, due to the war in Ukraine, price increases reached extremely high levels (compared to the same month of the previous year, the average increase was as high as more than 45%). Especially in October 2022, although the growth rate has weakened slightly, it is still 34.5%.
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According to analysis by the Bureau of Statistics, the main reason for the decline in producer prices in October 2023 compared with the same period last year is the decline in energy prices. Intermediate goods were also cheaper than in the same month last year, while consumer goods and capital goods showed price increases. Energy prices fell compared with the same month last year, mainly due to lower electricity prices.
Energy prices in October 2023 were 27.9% cheaper than the same month last year. Compared with September 2023, energy prices fell slightly by 0.1%. After Russia invaded Ukraine in February 2022, the prices of various energy sources in Germany rose sharply and reached a peak in September 2022. In October 2023, compared with the same month in the previous year, the decline in electricity prices had the greatest impact on the energy change rate. Compared with October 2022, overall electricity prices have dropped by an average of 36.2% (compared with September 2023 by a further 1.4%).
Compared with October 2022, natural gas distribution costs decreased by 29.6% in October this year. However, compared with the previous month of September 2023, natural gas prices increased by 1.4%.
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The price of petroleum products in October 2023 will be 13.2% lower than that in October 2022; compared with September 2023, it will be 2.1% lower. Light heating fuel costs are down 22.3% compared to the same period last year (down 2.1% compared to September 2023). Fuel prices fell by 12.8% (-3.0% compared to September 2023).
Excluding energy products, producer prices were 0.2% higher than in October 2022 and 0.2% lower than in September 2023.
In October 2023, the price of intermediate products fell by 4.6% compared with the same period last year. Compared with the previous month, it decreased by 0.2%. The price of intermediate products fell, mainly due to the decline in the prices of metals and chemical raw materials.
The prices of various metals have dropped by an average of 11.7% compared with October 2022. Compared with last month, metal prices fell another 0.9%. The cost of pig iron, steel and ferroalloys fell by 18.9% compared with October 2022. Steel bar prices fell 30.9% compared with the same period last year. The overall price of chemical raw materials was 12.1% cheaper than the same month last year. Compared with October 2022, the prices of chemical fertilizers and nitrogen compounds have fallen particularly sharply (-45.4%). Lumber prices are 17.9% cheaper than in October 2022, and livestock feed is 22.3% cheaper.
However, compared with October 2022, the price increases of ready-mixed concrete (+24.7%), cement (+22.0%), lime and gypsum (+19.9%) and insulated glass (+17.5%) were higher. The cost of construction gravel and natural sand is also 17.1% higher.
Data from the Bureau of Statistics also shows that the increase in consumer goods prices is mainly due to the increase in food prices. Consumer goods prices in October 2023 increased by 3.9% compared with October 2022, but decreased by 0.2% compared with September 2023. Food prices increased by 3.7% compared to the previous year, and prices also decreased compared with September 2023 (-0.3%). The price of processed potatoes increased by 29.4% compared with October 2022, the price of fruit and vegetable products increased by 16.0% compared with October 2022, and the price of pork increased by 10.4%. On the other hand, untreated vegetable oil is cheaper than in the same month last year (-34.1%), and cream prices fell by 29.5%. Liquid milk is 8.8% cheaper than in October 2022, and coffee is 4.6% cheaper.
In October 2023, durable goods prices increased by 4.2% compared with the same period last year, especially due to increases in furniture prices (up 4.8% compared with October 2022). Compared with September 2023, overall consumer goods prices increased by an average of 0.2%.
Capital goods prices increased by 4.4% compared to the same month last year, due in particular to higher prices for machinery (up 5.4% compared to October 2022) and motor vehicles and vehicle parts (up 3.9% compared to October 2022). Compared with September 2023, the average price of capital goods increased by 0.1%. (Source: International Trade Administration, Ministry of Economic Affairs)
Data source-MoneyDJ Financial Management Network
