Producer Price Index Rises by 0.2% in Euro Area and EU, in Accordance with Forecasts

• There is a small monthly increase in industrial prices in the Euro area.
• There is a substantial annual decline in industrial producer prices.
• Variations in prices across regions are evident in the EU.

Industrial Producer Prices in Euro Area and EU Experience Slight Rise

In October 2023, the industrial producer prices in the euro area and the European Union (EU) saw a marginal increase of 0.2% compared to September 2023, in line with market expectations. This mirrors the previous month's trend, where a 0.5% rise was recorded.

Fluctuations Across Sectors

Across sectors, there were varying changes. In the euro area, the energy sector saw a significant 1.0% increase, while durable consumer goods inched up by 0.1%.

Conversely, capital goods prices remained steady, and non-durable consumer goods and intermediate goods experienced declines, leading to a 0.2% decrease in total industry excluding energy. The EU reflected a similar pattern, with energy prices increasing by 0.6% but other sectors seeing declines.

Yearly Contrasts Show Substantial Decreases

Year-over-year comparisons revealed significant declines. In comparison to October 2022, industrial producer prices dropped by 9.4% in the euro area and 8.7% in the EU. The energy sector experienced a notable decrease of 25.0% in the euro area and 22.7% in the EU. Intermediate goods recorded decreases, while capital goods and consumer goods saw slight increases.

Regional Price Disparities

The impact of these price changes varied widely across Member States. Ireland, Italy, and the Netherlands observed the most substantial monthly increases, while Luxembourg, Latvia, and Greece reported the largest decreases. Annually, Bulgaria, Belgium, and Greece noted the most significant drops in industrial producer prices, whereas Luxembourg, Slovenia, and Slovakia witnessed increases.

Short-Term Outlook: Cautious Bearish Trend

In light of these findings, the near-term outlook for the industrial producer market in the euro area and the EU appears cautiously bearish. The significant yearly decreases, particularly in the energy sector, overshadow the marginal monthly increases, signaling downward pressure on prices. This suggests a cooling period for the industrial market in the short term.