Germany's producer price index fell more than forecast in May

According to the report from Federal Statistical Office (Destatis), in May 2020 the index of producer prices for industrial products decreased by 2.2% compared with the corresponding month of the preceding year. Economists had expected a 2.1% decrease. In April the annual rate of change all over had been –1.9%. Compared with the preceding month April the overall index fell by 0.4% in May 2020 (-0.7% in April). Economists had expected a 0.3% decrease.

Energy prices as a whole decreased by 7.9% (-1.2% compared to April 2020). On an annual basis, prices of petroleum products were down 27.5%. They fell by 3.1% compared to April 2020. A great part of this decrease presumably is due to the fallen decline in demand during the Corona pandemic. Prices of natural gas (distribution) decreased by 13.4%.

The overall index disregarding energy was 0.3% down on May 2019 and fell by 0.2% compared to April 2020.

Prices of intermediate goods decreased by 2.6% compared to May 2019 (-0.1% on April 2020). Prices decreased especially regarding basic iron, steel and ferro-alloys (-9.6%) as well as paper and paperboard (-5.8%) and basic chemicals (-8.2%). Prices of cereal flour were down 3.5%. By contrast, prices of precious metals increased by 25.6% compared to May 2019. Prices of articles of concrete, cement and plaster rose by 3.7%.

Prices of non-durable consumer goods increased by 1.3% compared to May 2019 (-1.1% on April 2020). Food prices were up 1.5% on May 2019. The price of sugar increased by 17.5%. Prices of meat and poultry meat products rose by 14.1%. By contrast, prices of swine fresh or chilled fell by 7.2% (-12.5% on April 2020). In addition, butter prices fell by 25.2% compared to May 2019 and prices for processed and preserved potatoes were 8.6 % down on May 2019.