Producer prices of industrial products in Germany were 12.6% lower in August 2023 than in August 2022; the largest decline in producer prices

September 25, 2023

Producer prices of industrial products (domestic sales), August 2023
-12.6% on the same month a year earlier
+0.3% on the previous month

The producer prices of industrial products in Germany were 12.6% lower in August 2023 than in August 2022. This was the largest decline in producer prices compared with the same month a year earlier since data collection began in 1949. The development is mainly attributable to a base effect caused by the very high price level of the previous year. As a result of the war in Ukraine, the increase in producer prices in August 2022 (+45.8% from August 2021) was the highest ever registered since records began. The Federal Statistical Office (Destatis) also reports that the year-on-year change rate was -6.0% in July 2023. Compared with July 2023, producer prices were up 0.3% in August 2023.

Year-on-year decline in energy prices mainly due to lower electricity prices

Energy prices in August 2023 were down 31.9% from August 2022. Compared with July 2023, however, energy prices were up 1.6%. Energy prices had soared after the start of the Russian attack on Ukraine in February 2022, and reached an all-time high in September 2022. In August 2023, lower electricity prices had the biggest influence on the year-on-year rate of change for energy. Across all customer groups, electricity prices declined by 43.2% compared with August 2022 but were up 2.6% from July 2023.

Natural gas (distribution) cost 32.4% less in August 2023 than in August 2022 across all customer groups. Compared with July 2023, however, natural gas prices were up 0.6%.

The prices of mineral oil products were down 8.7% in August 2023 compared with August 2022, but were up 5.9% from July 2023. Light heating oil cost 24.0% less than a year earlier (+16.5% compared with July 2023). Motor fuel prices fell by 3.0% (+5.9% from July 2023).

When energy prices are excluded, producer prices in August 2023 were 1.2% higher than in August 2022 and 0.4% lower than in July 2023.

Price decreases for intermediate goods mainly due to lower metal prices

Intermediate goods prices were 4.1% lower in August 2023 than a year earlier. Compared with the previous month, they were down 0.7%.

The year-on-year decline in prices was mainly due to the price development for metals. Metal prices dropped by 10.8% from August 2022 and were 1.3% lower than in the previous month. Basic iron, steel and ferro-alloys were 16.1% less expensive than in August 2022. The prices of concrete reinforcing bars declined by 35.5% year on year.

Very large price decreases were also recorded for fertilisers and nitrogen compounds (-40.8% compared with August 2022). The prices of wooden containers were 27.2% lower than in August 2022, and the prices of wood and secondary raw materials were down 23.4% and 20.4%, respectively.

By contrast, large price increases compared with August 2022 were observed for lime and plaster (+34.1%), ready-mixed concrete (+26.7%), cement (+26.3%) and hollow glass (+24.9%). Gravel for construction and natural sands were 16.8% more expensive.

Significant hike in non-durable consumer goods prices mainly due to higher food prices

In August 2023, the prices of non-durable consumer goods were 6.9% higher than in August 2022. Compared with July 2023, they were down 0.3%. Food prices increased by 7.6% from the previous year, with a particularly pronounced increase in sugar prices (+87.2% on August 2022). Processed potatoes were 32.3% more expensive than in August 2022, and pork prices were up 24.7%. The prices of processed and preserved fruit and vegetables were 17.8% higher than a year earlier. Only a few products were less expensive in August 2023 than in the same month of the preceding year. For example, the prices of crude vegetable oils decreased by 39.7% and butter prices dropped by 32.4%. Processed liquid milk was 5.4% less expensive than in August 2022, and coffee was 5.3% less expensive.

A year-on-year rise of 5.2% was observed for durable consumer goods in August 2023, which was especially due to the development of prices for furniture (+5.5% on August 2022) and domestic appliances (+5.7% on August 2022). Compared with July 2023, the prices of durable consumer goods remained unchanged.

Capital goods prices rose by 5.1% year on year, mainly driven by increases in machinery prices (+6.4% on August 2022) and in the prices of motor vehicles, trailers and semi-trailers (+4.1% on August 2022). Compared with July 2023, the prices of capital goods remained unchanged.

Source: DESTATIS
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