Manufacturers' costs decrease beyond predictions
Ahead of the expected increase in interest rates in the Eurozone, producer prices have dropped by more than anticipated and point to decreasing pressure on inflation. Eurostat, the European Statistical Office, revealed on Wednesday that the decline was 1.0% in April compared to the preceding month. Economists polled by Reuters forecasted a decrease of 0.4%, following a 0.5% drop in March. Compared to the previous year, producer prices in April declined by 5.7%. Economists had predicted a decrease of 5.3%, after a decline of 7.8% in March. In the early part of 2023, producer prices increased by double-digit percentages.
Attributing to the fall in inflationary pressure, energy costs were formerly contributing to inflation, but now they are curbing price growth. Producer prices for energy decreased by 14.7% in April compared to the previous year. If this sector is disregarded, producer prices in industry were down by only 1.0%. The statistics list the prices at the factory gate, which indicates costs before they undergo further processing or trading. As a result, these figures function as an early signal of consumer price movement.
