Decrease of 12.6 percent
In August 2023, producer prices of industrial products recorded the largest year-on-year decline since records began in 1949, falling by 12.6 percent. As reported by the Federal Statistical Office (Destatis), this decline was largely due to a base effect resulting from the high price level in the previous year.
In August 2023, however, producer prices increased by 0.3 percent compared with July 2023. According to Destatis, the main reasons for the year-on-year decline in producer prices were falling prices in the energy sector and for intermediate goods.
Energy prices fall
Destatis further reports that the cost of energy in August 2023 decreased by a substantial 31.9 percent compared to the same month last year. In contrast, energy prices recorded a 1.6 percent increase compared to the previous month.
Price decreases for electricity showed the largest impact on the rate of change in August 2023 compared to the same period last year in the energy sector. Electricity prices decreased 43.2 percent from a year ago, while they increased 2.6 percent from the previous month.
In the case of natural gas in distribution, prices recorded a decrease of 32.4 percent compared to August 2022 across all customer groups, whereas there was an increase of 0.6 percent in natural gas prices compared to the previous month.
Price development of the goods classes
In August 2023, prices for intermediate goods were 4.1 percent lower than a year earlier. Compared with the previous month, prices fell by 0.7 percent. According to Destatis, the main reason for the year-on-year price decline was the development of metal prices, which were 10.8 percent lower than in the same month last year.
Consumer goods cost 6.9 percent more in August than a year earlier, although they were 0.3 percent cheaper compared to the previous month. Within this category, food was particularly expensive, rising 7.6 percent from a year earlier.
Durable goods saw a 5.2 percent year-on-year price increase, mainly due to the price development of furniture as well as household appliances. Furniture prices rose by 5.5 percent and household appliances by 5.7 percent.
Year-on-year, prices for capital goods rose by 5.1 percent in August 2023, with price increases for machinery of 6.4 percent and for motor vehicles and parts of 4.1 percent contributing to this increase.