German producer prices grow at fastest rate in 47 years

According to Destatis, Germany’s Federal Statistical Office, the index of producer prices for industrial products jumped 12.0% year-on-year in August, or by 1.5% compared to July 2021.

The annual growth rate was the fastest since December 1974, when prices surged 12.4% during the oil crisis.

Destatis said the price of energy was "mainly responsible" for the hike. Energy prices rose 24.0% in August year-on-year and by 3.3% month-on-month.

"Mainly responsible for the high rise of energy prices were the strong increase regarding natural gas (distribution)," Destatis added.

Global gas prices have surged throughout the year, caused by a variety of factors including higher demand as economies emerge from the worst of the pandemic, low solar and wind output, and lower supplies from Russia, Europe’s largest supplier.

Prices of intermediate products such as wood, secondary raw materials and metals also helped push the index higher, however, after they jumped 17.1% annually and by 1.4% on a monthly basis.

The increase in steel and wood prices was attributed to increasing demand in Germany and abroad, along with problems with the supply of raw materials and "sharp increases of import prices for iron ore", Destatis noted.

Sawn timber prices surged 124% on an annual basis, while wooden packaging materials jumped 84.9% and reinforcing steel in bars were ahead 87.2%.