Price Expectations Have Risen Again
The ifo price expectations in Germany rose to 17.8 points in July, up from 16.1* points in June. In manufacturing in particular, somewhat more companies intend to raise their prices than in the previous month. Consumer-related businesses, on the other hand, are less likely to plan price increases. “The inflation rate will therefore probably to decline further in the coming months,” says ifo economic expert Sascha Möhrle.
The indicator fell among consumer-related service providers to 20.0 points, down from 21.9 points* in June, the lowest level since April 2021. “Due to its high wage share of total costs, this sector is particularly in the focus of the currency regulators, as inflation is still at its highest here at just under 4% as a result of the strong wage increases,” says Möhrle. Food retailers reported a significant increase to 55.2 points, up from 34.3* points in June. In the rest of the retail sector, however, fewer companies are planning to raise prices (22.7 points, down from 23.3* in June).
In the manufacturing sector, price expectations rose to 7.3 points, up from 6.6 points in June. By contrast, fewer companies in the business-related service sectors (including wholesale) and the construction industry intend to raise their prices. In these areas, the indicator fell to 20.6 and 0.9 points respectively, down from 22.5* and 2.1* points in June.
The points for the ifo price expectations indicate the percentage of companies that intend to increase prices on balance. The balance is obtained by subtracting the percentage of companies that want to lower their prices from the percentage of those that want to raise their prices. If all the companies surveyed intended to increase their prices, the balance would be +100 points. If they all wanted to lower their prices, it would be −100. The balance was seasonally adjusted. The ifo Institute does not ask about the amount of the planned price change.
Source: ifo Institute
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.
