Producer prices for commercial products in Germany fell slightly in October 2024. Compared to the same month last year, prices fell by 1.1%. In comparison to the previous month, prices rose by 0.2%. These changes reveal some of the challenges facing the production sector, in light of the fluctuations in prices on the local and global market levels.
Producer prices down compared to last year
According to data from the German Federal Statistical Office, the figures indicate that producer prices fell by 1.1% in October 2024 compared to October 2023. This decrease reflects some of the pressures facing the domestic production sector in Germany. In September 2024, the rate of decline was greater, at 1.4% compared to the same month last year..
Slight increase compared to last month
Despite the decline in prices on an annual basis, producer prices witnessed a slight increase of 0.2% compared to September 2024. This improvement is considered an indication of some improvement in the market for commercial products, although the increase is still limited.
Factors affecting price changes
Several factors affect changes in producer prices, including changes in the cost of raw materials, energy prices, in addition to global economic challenges. Geopolitical tensions, such as trade wars or regional crises, can also affect the prices of goods and services worldwide. In this context, the rise in energy prices is one of the most prominent factors that directly affect production costs. If these costs continue to rise, we may witness further price increases at the producer level in the coming months.
The main reason for the decline in producer prices compared to the same month last year in October 2024 was the decline in energy prices, while capital, consumer and intermediate goods were more expensive.
Sharp declines in natural gas and power prices in October 2024
Energy prices fell significantly in October 2024 compared to the same month last year, declining by 5.6%. While this decline reflects the major changes in energy markets, prices rose slightly by 0.6% compared to September 2024. This slight increase is an indication of some relative stability after the large price declines.
Petroleum Product Prices Have a Major Impact
The decline in petroleum product prices had the greatest impact on the year-on-year changes in energy prices. In October 2024, petroleum product prices fell by 12.9% compared to the same month last year, helping to reduce the overall energy bill. In contrast, these prices increased by 0.9% compared to September 2024, reflecting minor fluctuations in oil markets.
As for light heating oil, its prices decreased by 22.7% compared to October 2023. Despite this significant decrease on an annual basis, heating oil prices increased by 4.9% compared to September 2024, reflecting the slight pressures that energy markets may face during certain periods.
Natural Gas and Electricity: Price Variation
As for natural gas, its prices witnessed a significant decrease of 10.1% compared to October 2023, while it witnessed an increase of 1.1% compared to September 2024. These changes reflect the ongoing volatility in natural gas markets, which are affected by several factors such as weather, industrial consumption, and government policies.
Electricity prices fell by 7.3% year-on-year, compared to October 2023. However, prices rose by 0.5% compared to September 2024.
Slight increase in producer prices excluding energy
Despite the significant declines in energy prices, producer prices overall increased by 1.3% in October 2024 compared to the same month last year. This increase came amid stable prices for other products excluding energy. Compared to September 2024, producer prices remained unchanged (0.0%), indicating relative stability in other categories of goods and services.
Slight increase in prices of intermediate goods in October 2024
Prices of intermediate goods in Germany increased slightly by 0.4% in October 2024 compared to the same month last year. However, prices decreased slightly by 0.3% compared to September 2024. These changes reflect relatively volatile prices in the intermediate goods markets, which significantly affect production costs in many industries.
Intermediate goods that saw a significant increase
While there was a general decrease in prices for some intermediate goods, some products recorded significant increases compared to October 2023. The most notable of these increases were electrical transformers, which rose by 5.5%. Natural stones, gravel, sand, clay and kaolin also saw increases of 4.6%. On the other hand, gypsum products for construction saw an increase of 3.7%, and cables and electrical installation materials rose by 1.7%. These increases reflect the continued growth in some industries that rely on intermediate goods, such as construction and electricity.
Wood and wood products: Price variation
Wood, wood products and cork prices continued to increase, rising by 0.6% compared to 2023. However, there were significant differences in the prices of different types of wood. For example, softwood prices increased by 13.9%, reflecting a significant increase in the costs of this product. On the other hand, wood-based panels prices decreased by 5.0%, and fiberboard prices decreased by 2.4%. Hardwood, on the other hand, decreased by 6.9% compared to the same month last year, indicating fluctuations in wood prices by type.
Decline in metal prices: iron and copper
Although some metals saw a decline in prices, copper and copper products saw a significant increase. Metal prices in general decreased by 0.4% compared to October 2023. The largest decline was in iron ore, steel and ferroalloy prices, which decreased by 7.7% compared to the same month last year. In contrast, prices of copper.
Decrease in prices of chemical raw materials
Chemical raw material prices fell by 1.6% compared to October 2023. Among the most notable decreases was livestock feed, which fell by 2.8%. Glass and glassware prices also fell by 4.6% compared to the same month last year. This decrease reflects the challenges facing the chemical raw material industry in light of the global economic conditions.
Increase in prices of capital goods, consumer goods and durable goods
Capital goods prices rose by 2.0% in October 2024 compared to the same month last year (+0.2% compared to September 2024). The cost of machinery rose by 2.0% compared to October 2023. The prices of vehicles and vehicle spare parts rose by 1.4% compared to October 2023.
Consumer goods were 1.9% more expensive in October 2024 than in October 2023 (+0.2% compared to September 2024). Food costs were 2.1% higher than in October 2023. Butter was significantly more expensive than in the same month last year at +52.9% (+6.0% compared to September 2024) and sweets at +20.1%. Coffee was 7.1% more expensive than in October 2023. In contrast, cereal flour (-10.7%) and pork (-5.4%) in particular were cheaper in October 2024 than in the same month the previous year.
Durable goods were 0.9% more expensive in October 2024 than in the previous year (+0.2% compared to September 2024).
