German producer costs decrease once more, primarily due to lower energy expenses.
The persistent decrease in German manufacturing costs, happening for over a year now, persisted in August, mainly due to reduced energy costs. Various merchants, from dairy product makers to energy suppliers, offered goods at an average of 0.8% less than a year prior, as per the Federal Statistical Office. This marked the 14th consecutive decrease. Economists, surveyed by Reuters, had projected a slight steeper decrease of 1.0%, following the 0.8% fall in July. There was a minute increase in prices from July to August, amounting to 0.2%.
Producer prices, which are tracked before products undergo further refinement or enter wholesale and retail trade, are often seen as precursors to consumer price trends. Germany's inflation rate dropped to its lowest point in over three years in August, with goods and services costing an average of 1.9% more than the previous year, down from a 2.3% increase in July.
The August decrease in producer prices was yet again propelled by lower energy costs, which were 4.6% cheaper compared to the previous year. Gas prices plummeted by 10.1%, while electricity became 9.2% less expensive. Mineral oil products, averagely, were 4.7% cheaper, with fuels like gasoline decreasing by 8.3% and light heating oil declining by 11.5% from August 2023. Excluding energy, producer prices would have risen by 1.2%.
Food prices saw a mild increase of 0.7% compared to August 2023. Butter (up 41.7%) and sweets (up 22.0%) became relatively costlier. Fruit and vegetable products witnessed a price surge of 5.2%. In stark contrast, pork (down 11.6%) was remarkably cheaper compared to the previous year.
The merchants followed the trend set by reduced energy costs, offering goods at lower prices to match the 0.8% decrease from the previous year. Economists had anticipated a steeper decrease, but the minute increase in prices in August still fell short of their projection.
