In November 2024, Germany’s producer prices recorded an unexpected year-on-year increase of 0.1%, rebounding from a 1.1% decline in October. This marked the first uptick since June 2023, surpassing market expectations of a 0.3% drop. The rise was mainly driven by capital goods, which saw a 1.9% increase, bolstered by higher costs for machinery (2.0%) and motor vehicles and parts (1.4%).

Consumer and Intermediate Goods Push Prices Higher

Producer prices also rose for consumer goods, which were up by 0.9%, with non-durable consumer goods surging by 2.4%. Additionally, intermediate goods experienced a modest price increase of 0.4%. These categories highlight the growing demand and cost pressures across sectors, contributing to the overall rebound in producer prices.

Softer Energy Price Declines Ease Downward Pressure

Energy prices continued to decline but at a much slower rate, falling by 2.4% compared to a 5.6% drop in October. The softer decline reflected smaller decreases in costs for mineral oil products (-8.6%), light heating oil (-13.2%), motor fuels (-8.4%), natural gas (-7.5%), and electricity (-3.1%). Excluding energy, producer prices rose by 1.3%, emphasizing the broader upward trend in production costs.

Monthly Gains Highlight Renewed Momentum

On a monthly basis, producer prices climbed by 0.5% in November, marking the most significant increase since April 2023 and exceeding market forecasts of a 0.3% rise. This follows a 0.2% gain in October, indicating renewed momentum in producer price growth and signaling potential implications for inflationary trends in Germany’s economy moving forward.