The German PPI increased by +14.2% YoY in September. According to Destatis, this was the largest increase over the previous year's corresponding month since October 1974 (+14.5%), when prices surged sharply during the first oil crisis. The overall index increased by +2.3% MoM. The price increase of energy was mostly responsible for the YoY rise of producer prices.

As a whole, energy prices increased by +32.6% YoY and by +8.0% MoM. This was mainly due to the high increase regarding natural gas (distribution), which was +58.9% YoY.

Excluding energy, the overall index climbed by +8.6% YoY.

Intermediate goods prices climbed by +17.4% YoY and by +0.6% MoM. High YoY price increases were recorded for sawn timber (+118%), wooden packaging materials (+92.5%), secondary raw materials (+87.2%), and reinforcing steel in bars (+81.8%). Metal prices increased YoY by +35.5%, as metallic steel and ferro-alloys increased by +59.8%, and non-ferrous metals increased by +21.1%.

The main reasons for the surge in steel and wood prices are likely to be increasing demand in Germany and abroad, challenges with raw material supply and sharp rises of iron ore import prices in the past month (+96.8% YoY increase in August). Further price increases were registered for primary plastics (+22.2%) and fertilisers and nitrogen compounds (+21.1%). Cereal flour prices increased by +9.6%. Only a few intermediate goods declined YoY, such as wood in chips and particles (-14.7%) and precious metals (-7.2%).

Non-durable consumer goods prices climbed YoY by +2.2%, but remained stable MoM. Food prices climbed by +2.8% YoY, as crude vegetable oils climbed by +43.8%, butter prices by +15.5%, and beef prices by +11.3%. Bread, fresh pastry goods, and cakes increased by +3.9%. By contrast, pork prices fell by -5.5% whereas processed potatoes decreased by -2.2%.