Manufacturers continue to raise their prices

Berlin German manufacturers raised their prices at record speed in February. The producer prices of commercial products rose by an average of 25.9 percent compared to the same month last year. “This was the strongest increase since the survey began in 1949,” said the Federal Statistical Office on Monday.

Economists polled by Reuters had expected an even sharper rise of 26.2 percent from January’s 25.0 percent rate. Not only energy products, but also many other goods cost significantly more than a year ago – from coffee to butter. “Recent price trends related to Russia’s attack on Ukraine are not included in the results,” the statisticians said at the same time.

The development indicates that consumers must be prepared for persistently high price increases. Because retailers should pass on at least part of it to the end consumer.

Producer prices are seen as a precursor to the development of inflation. In the statistics, the prices are listed from the factory gate – even before the products are further processed or sold.

The Kiel Institute for the World Economy (IfW) does not expect prices to normalize for the time being, also because of the war in Ukraine. “The inflation rate this year at 5.8 percent is likely to be higher than ever before in reunified Germany,” says the current forecast.

According to the statisticians, the main reason for the sharp rise in producer prices was once again energy. It rose in February by an average of 68.0 percent. Natural gas cost 125.4 percent more than in February 2021, electricity two-thirds and light heating oil 56.9 percent more.

If you exclude energy, producer prices were only 12.4 percent above the previous year’s value. For food, the premium was 9.2 percent. The prices for untreated vegetable oils (+50.1 percent), butter (+64.4 percent) and coffee (+16.9 percent) rose particularly sharply.

More: Read all developments in the Ukraine war in the live blog here