In October, producer prices in European industry fall

Producer prices in the EU and eurozone industry fell in October for the first time since the beginning of the COVID pandemic, pressured by falling energy prices, a report from Eurostat showed on Friday.

At the EU level, producer prices of industrial products fell by 2.5 percent in October compared to September, when they were revised up by 1.4 percent, the EU statistical office reported. In the eurozone, they fell by 2.9 percent, following a September increase of 1.6 percent. The last time prices in both areas fell on a monthly basis was in May 2020, at the peak of the first wave of the COVID pandemic.

The largest burden was energy, whose producer prices fell by 6.6 percent in the EU and by 6.9 percent in the eurozone compared to September, when they had risen by 2.5 and 3.1 percent, respectively, according to calculations from the statistical office.

In all other product categories, prices increased, most notably in the non-durable consumer goods sector, by just over one percent in both areas.

The most modest increases were recorded for intermediate goods and capital goods, by about 0.3 percent in both areas. Durable consumer goods also saw a slight increase, by 0.5 percent in both the EU and the eurozone.

When excluding the energy sector, producer prices in the industry in October increased by 0.5 percent on a monthly basis in both the EU and the eurozone, similar to the previous month.

Sudden drop in Ireland

The most pronounced drop in producer prices of industrial products in October compared to September was recorded in Ireland, at 32.5 percent. This was followed by Bulgaria and Denmark, with price drops of 8.8 percent and 5.5 percent compared to the previous month.

In Croatia, producer prices of industrial products rose by one percent in October compared to September when they had jumped by three percent, according to Eurostat tables. Poland was closest to Croatia with a price increase of 0.9 percent.

Prices rose in 13 member states, led by Greece, where they increased by 9.6 percent. Hungary and Belgium followed with increases of 6.2 percent and 2.8 percent, respectively. The most modest price increases were recorded in Austria, Cyprus, Malta, and Slovenia, each by 0.3 percent.

Milder increase in energy

On an annual basis, producer prices of industrial products in the EU and eurozone in October sharply slowed, rising by 31.2 percent and 30.8 percent, the mildest since the beginning of the year. For comparison, in September, they were higher by 41.4 percent in the EU and by 41.9 percent in the eurozone.

The farthest price increase, although significantly weaker than before, was recorded for energy, whose price rose by 67 percent in the EU and by 65.8 percent in the eurozone in October, after being more than double in both areas in September. Intermediate goods followed with a price increase of 17.6 percent in the EU and 17.4 percent in the eurozone, according to Eurostat tables.

A similar double-digit price increase was recorded for non-durable consumer goods, which rose by 17.1 percent in the EU and by 16 percent in the eurozone. Durable consumer goods also recorded a double-digit growth rate, of about 10 percent in both areas. The least increase was again for capital goods, by 7.7 percent in the EU and by 7.5 percent in the eurozone.

When excluding the energy sector, producer prices in the industry were higher by 14.5 percent in the EU and by 14 percent in the eurozone, after having been increased by a similar percentage in September.

Croatia alongside the Czech Republic

All EU countries also recorded double-digit growth rates in producer prices in the industry in October compared to the same month last year, except for Malta, where they rose by 8.7 percent.

The strongest increase was in Hungary, at 68 percent. This was followed by Slovakia and Latvia with price jumps of 59.3 percent and 57.9 percent, respectively.

In Croatia, producer prices of industrial products in October were 23.7 percent higher than in the same month the previous year, the mildest since February. In September, they had risen by 30.2 percent. The Czech Republic was closest to Croatia with a producer price increase of 24.1 percent, according to Eurostat tables.

Only Ireland recorded a drop in prices on an annual basis, by 17.2 percent.