Manufacturers are complaining about the explosion in the costs of primary products

Rising energy prices, shortage of wheat on the world market: the war in Ukraine puts production companies in Europe under pressure. Manufacturers will soon have to pass on the price surcharges to customers.

Producer prices in the euro area are rising at an unprecedented pace due to the explosion of costs in the energy sector. Producer prices in industry rose a record 36.8% in March compared to the same month last year, according to Eurostat’s statistical office on Tuesday. Economists interviewed by Reuters had expected a slightly weaker 36.3% rise. In February, the increase was still 31.5%, which was also a record increase.

Energy alone saw a sharp rise of 104.1%. Excluding this area, producer prices increased overall by only 13.6%. Prices for important intermediate goods in production rose by nearly 23 percent. Energy and expensive raw materials are weighing more and more on the economy. The German logistics industry is already warning of a wave of insolvencies.

Inflation in the euro area above the ECB target

Producer prices are considered a leading indicator of inflation trends. In the statistics, the prices are indicated by the factory gate, that is, before the products are further processed or sold. Thus, an initial indication of the trend in consumer prices can be given.

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