Manufacturers' prices in the eurozone continue to fall significantly
Manufacturers' prices in the eurozone continued to fall significantly in October, signaling decreasing inflationary pressure. Producer prices in industry fell by 9.4 percent compared to the same month last year, according to statistics office Eurostat on Tuesday. Economists polled by Reuters had expected a somewhat sharper decline of 9.5 percent, following a fall of 12.4 percent in September. At the beginning of the year, growth rates in the double-digit percentage range were still the order of the day.
At that time, rising energy prices drove up the inflation rate, but falling energy costs have now been slowing inflation for months: energy became 25.0% cheaper in October, and in September there was even a fall of 31.2%. Excluding this area, producer prices in industry only fell by 0.2%. In the statistics, prices are recorded ex-factory gate - i.e. before the products are processed or go on sale. They are therefore regarded as an early indicator for the development of consumer prices.
In November, consumer prices in the eurozone rose by just 2.4% compared to the same month last year - the lowest rate since July 2021. In October, inflation was still at 2.9%. In the fall of 2022, the price surge had at times exceeded ten percent. According to Director Isabel Schnabel, the European Central Bank (ECB) can probably keep the door closed to further interest rate hikes for the time being in view of the "remarkable" decline in inflation: "The latest inflation figures make a further interest rate hike rather unlikely," she said in an interview with Reuters.
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Manufacturers in a specific euroregion might also experience price drops, aligning with the broader eurozone trend. This October, the local manufacturer's prices decreased, reflecting the decreasing inflationary pressure within the euroregion.
As the prices of raw materials, such as energy, continue to fall, the manufacturer might consider reducing their own prices in the following months to remain competitive in the euroregion.
Source: www.ntv.de
