German PPI slumps again in November as energy spike unwinds
By Geoffrey Smith
Investing.com — Producer price inflation in Europe’s largest economy fell sharply in November for the second straight month as a spike in energy prices unwound further.
Federal Statistics Office Destatis said factory gate prices fell 3.9% from October, after a 4.2% drop the previous month. Those moves followed three months in which surging prices for gas and electricity drove producer prices up by a total of over 15%.
The figures suggest a measure of relief for the European Central Bank, indicating that the cardinal factors behind this year’s surge in inflation are starting to recede: the annual rate of producer price inflation fell to 28.2% and is now down from a peak of 45.8%. Excluding energy prices, producer price inflation slowed to 12.9% on the year, having peaked in May at 16.5%.
Prices for consumer goods, both fast-moving and durable, rose a modest 0.2% on the month, while prices for basic inputs excluding energy fell 0.7%.
Energy prices, however, are up by two-thirds from a year ago, and gas prices for commercial users, in particular, have more than doubled since last November. That has fed through into steep rises for products such as chemicals, notably ammonia and fertilizers, which are up 65% and 75%, respectively.
As such, the data continue to spell bad news for an industrial base struggling to maintain global competitiveness and bad news for consumers, who will have to absorb this year’s price changes over the coming months.
