In November 2024, producer prices for industrial products rose by 0.1% compared to the same month the previous year. This is the first increase since June 2023, when producer prices increased by 1.2% compared to June 2022. In October 2024, prices had fallen by -1.1% compared to the same month the previous year. According to the Federal Statistical Office, producer prices rose by 0.5% compared to October 2024.
The increase in producer prices is due to higher prices for capital goods, which are goods that are used to produce other products. The data also showed that non-durable consumer goods, such as food, and durable consumer goods, such as cars, also saw increases. On the other hand, prices for intermediate goods, which are used to make other goods, also rose.
However, the impact of lower energy prices was noticeable, as energy prices were less expensive compared to the same month the previous year. When the impact of energy is excluded, producer prices rose by 1.3% compared to November 2023. At the same time, prices fell by 0.1% compared to October 2024.
This increase in prices is an indicator of inflationary pressures that the economy may face in the near future. This indicates that companies may face challenges in controlling production costs. These price increases may also affect the purchasing power of consumers, which may increase concerns about the impact of inflation on the overall economy.
On the other hand, the increase in capital goods prices could be a sign of an improvement in economic investment in productive sectors. However, this could also lead to higher production costs in the long run. In the future, it will be important to monitor the impact of these increases on markets.
Non-durable consumer goods increased by 2.4%
Capital goods prices in November 2024 rose by 1.9% year-on-year, unchanged from the previous month. Machinery costs increased by 2.0% compared to November 2023. Motor vehicles and trailers prices rose by 1.4% compared to the same period. At the same time, non-durable consumer goods increased by 2.4% compared to the same month of the previous year, with food costs rising by 2.8%.
As for food items, butter was the highest increase by 42.9% compared to November 2023, while confectionery saw a significant increase by 23.9%. Beef prices also rose by 16.5% compared to the same month of the previous year. In contrast, cereal flour and pork prices decreased by 7.7% and 6.4%, respectively.
As for durable consumer goods, their prices rose by 0.9% compared to November 2023, unchanged from October 2024. This indicates stable prices in this sector.
Slight increase in intermediate goods prices
As for intermediate goods, prices witnessed a slight increase of 0.4% compared to the previous year, but recorded a slight decrease of 0.3% compared to the previous month. Among the intermediate goods that witnessed an increase in prices were stone, sand, clay and kaolin by 4.4%. The prices of gypsum products and wires and wiring devices also increased by 4.4% and 1.7%, respectively.
As for wood prices, they witnessed an increase of 2.0% compared to November 2023, as the prices of coniferous wood increased by 16.4%. However, the prices of non-coniferous wood decreased by 5.9% compared to the same month of the previous year. The prices of wood panels also recorded a decrease of 4.2% on an annual basis.
As for metals, their prices remained stable both on an annual and monthly basis. However, the prices of copper and its products increased by 8.3%. In contrast, the prices of iron and steel decreased by 7.4% compared.
Energy prices fall on an annual basis, but rise on a monthly basis
In November 2024, energy prices decreased by 2.4% compared to the same month last year. Despite this year-on-year decrease, energy prices increased by 1.8% compared to October 2024. The decrease in prices for mineral oil products had the greatest impact on this year-on-year change, as their prices decreased by 8.6% compared to November 2023. However, the prices of these products increased by 1.0% compared to the previous month.
On the other hand, the price of heating fuel decreased by 13.2% compared to November 2023, but increased by 1.2% compared to October 2024. The cost of motor fuel decreased by 8.4% compared to last year, with a slight increase of 0.4% compared to the previous month. Natural gas prices fell by 7.5% compared to November 2023. At the same time, gas prices increased by 1.1% compared to October 2024. As for electricity, prices decreased by 3.1% compared to the same month last year, but increased by 4.0% compared to the previous month.
In addition to these changes in energy prices, the Producer Price Index for industrial products has been recalculated as of January 2024, with 2021 becoming the new reference year. The base year is usually changed every five years. This change reflects a new method of calculating the indices using a weighting based on domestic industrial product sales in 2021.
This change updates all indices so that the new calculation reflects the new weighting system. Therefore, indices based on the old base year of 2015 are no longer valid. This update aims to improve the accuracy of industrial price measurement and better reflect changes in markets.
Re-establishing the base year is a necessary step to ensure that the indices accurately reflect current economic conditions. These adjustments require continuous monitoring by economic authorities to ensure an effective response to price changes.
