German producer price index rose more than expected in August

According to the report from the Federal Statistical Office (Destatis), in August 2021, the index of producer prices for industrial products increased by 12.0% compared with August 2020. This was the highest increase compared to the corresponding month of the preceding year since December 1974 (+12.4%), when prices rose strongly during the first oil crisis. Economists had expected a 11.4% increase. Compared with the preceding month July 2021 the overall index rose by 1.5% in August 2021. Economists had expected a 0.8% increase.

Mainly responsible for the increase of producer prices compared to August 2020 were the prices of energy followed by intermediate products. Energy prices as a whole were up 24.0% compared to August 2020 and by 3.3 compared to July 2021. Mainly responsible for the high rise of energy prices were the strong increase regarding natural gas (distribution).

Prices of intermediate goods increased by 17.1% compared to August 2020. Compared to July 2021 these prices were up 1.4 %. Compared to August 2020 intermediate goods’ prices increased especially regarding sawn timber (+124%) and metallic secondary raw materials (+104%) as well as wooden packaging materials (+89.4%) and reinforcing steel in bars (+87.2%). 

Prices of durable consumer goods increased by 2.8% compared to August 2020, mainly caused by the price development of furniture (+3.9%). Prices of non-durable consumer goods increased by 2.1% compared to August 2020 and rose by 0.2% compared to July 2021. From August 2020 to August 2021 food prices increased by 2.6%.