The producer prices of industrial products were 6.0% lower in July 2023 than in July 2022.
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The decline is therefore largely due to a base effect. The Federal Statistical Office (Destatis) reports that the prices had last dropped year on year in November 2020 (-0.5% compared with November 2019).
In June 2023, the year-on-year change rate was +0.1%. Compared with the previous month, producer prices were down 1.1% in July 2023.
The main reason for the year-on-year decline in producer prices were lower energy prices, but also decreases in the prices of intermediate goods. The prices of consumer and capital goods did not increase as sharply as in the previous months.
Energy prices were down 19.3% in July 2023 from July 2022. Compared with June 2023, energy prices dropped by 2.5%. Energy prices had soared after the start of the Russian attack on Ukraine in February 2022.
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 30.0% from July 2022 (-4.1% from June 2023).
Natural gas (distribution) cost 16.2% less in July 2023 than in July 2022 across all customer groups. This was the first year-on-year drop in prices since December 2020 (-3.3% compared with December 2019), when the prices went down in the context of the Covid-19 pandemic.
The prices of mineral oil products were down 16.6% in July 2023 compared with July 2022 and up 1.1% from June 2023. Light heating oil cost 37.5% less than a year earlier (+3.3% compared with June 2023). Motor fuel prices fell by 11.3% (+1.2% from June 2023).
When energy prices are excluded, producer prices were 2.0% higher than in July 2022 and 0.4% lower than in June 2023.
Intermediate goods prices were 3.4% lower in July 2023 than a year earlier. Compared with the previous month, they were down 1.0%.
The year-on-year decline in prices was mainly due to the price development for metals. Metal prices dropped by 10.5% from July 2022 and were 2.3% lower than in the previous month. Basic iron, steel and ferro-alloys were 17.7% less expensive than in July 2022.
The prices of concrete reinforcing bars in bars declined by 39.2% year on year (-5.9% on June 2023).
Very large price drops were recorded also for fertilisers and nitrogen compounds (-36.1% compared with July 2022). Wood prices were 28.9% lower than in July 2022, and those of wooden containers and secondary raw materials dropped by 27.4% and 21.2%, respectively.
By contrast, large price increases were observed for lime and plaster (+40.5%), hollow glass (+28.0%), cement (+27.4%) and ready-mixed concrete (+25.9%) compared with July 2022.
Industrial gases were 18.1% more expensive, and the prices of gravel for construction and natural sands were 17.8% higher.
In July 2023, the prices of non-durable consumer goods were 8.1% higher than in July 2022. Compared with June 2023, they remained unchanged.
Food prices increased by 9.2% from the previous year, with a particularly pronounced increase in sugar prices (+87.5% on July 2022). Processed potatoes were 32.2% more expensive than in July 2022, pork prices were up 32.0%.
The prices of processed and preserved fruit and vegetables rose by 18.5% from the previous year, while those of processed liquid milk and cream increased by just 0.1%.
Only a few products were less expensive in July 2023 than in the same month a year earlier. For example, butter prices dropped by 30.4%, and the prices of crude vegetable oils decreased by 38.8%.
A year-on-year rise of 5.8% was observed for durable consumer goods in July 2023, which was especially due to the development of prices for furniture (+6.0% on July 2022) and domestic appliances (+7.1% on July 2022).
Compared with June 2023, the prices of durable consumer goods remained unchanged.
Capital goods prices rose by 5.5% year on year, mainly driven by increases in machinery prices (+6.7% on July 2022) and in the prices of motor vehicles, trailers and semi-trailers (+5.1% on July 2022).
Capital goods prices were up 0.3% compared with June 2023. ■