German producer price index rose more than expected in March

According to the report from the Federal Statistical Office (Destatis), in March 2021, the index of producer prices for industrial products increased by 3.7% compared with March 2020. This was the highest increase compared to the corresponding month of the preceding year since November 2011 (+4.6%). Economists had expected a 3.3% increase. Compared with the preceding month February 2021 the overall index increased by 0.9% in March 2021. Economists had expected a 0.6% increase.

Mainly responsible for the increase of producer prices compared to March 2020 were the prices of energy and of intermediate products.

Energy prices as a whole increased by 8.0% compared to March 2020 and by 0.9% compared to February 2021. The price increase from March 2020 to March 2021 is mainly due to the increase of electricity prices (+9.6%), furthermore to the national CO2-pricing that has been introduced in January 2021 on several energy products. 

Prices of intermediate goods increased by 5.7% compared to March 2020. This was the highest price increase compared to the previous year since July 2011 (+5.8%). Compared to February 2021 these prices were up 1.6 %. Compared to March 2020 intermediate goods’ prices increased especially regarding metallic secondary raw material (+46.8%), prepared feeds for farm animals (+15.9%), sawn and planed wood (+13.9%) and metals (+12.9%). 

Prices of durable consumer goods increased by 1.4% compared to March 2020, capital goods, such as machines and vehicles, by 0.9%. 

Prices of non-durable consumer goods decreased by 1.4% compared to March 2020 but increased by 0.9% compared to February 2021. Food prices decreased from March 2020 to March 2021 by 2.5%, mainly driven by price decreases of pork by 20.8%, however these prices increased from February to March 2021 by 13.3%.