Germany Producer Price Index (PPI) m/m

The Producer Price Index (PPI) measures the domestic price changes of energy and water supply, mining and manufacturing in the Federal Republic of Germany in the given month compared to previous month. The reference figure for the overall index is the sum of all domestic commercial sales in the base year (currently: 2015), as reported mainly by the monthly reports of the mining and manufacturing industries. Thus, sales between commercial enterprises are also taken into account. In simplified terms, the index can be regarded as a weighted average of price changes with a base year = 100, calculated for a representative selection of industrial products. The index weights correspond to the sales of the respective products in the base year.

The figures are collected monthly from a representative selection of commercial companies on the 15th of each month. Questions are asked about the agreed prices on this day, shortly before or after. The prices determined are effective prices excluding value-added tax but possibly including excise duties (e.g. mineral oil tax, tobacco tax, electricity tax, natural gas tax) and other statutory levies (e.g. stock-holding contribution for mineral oil products, levies for “EEG” and “KWK” for electricity, concession levies for natural gas). Network usage fees and fees for metering point operation and billing are also included in the natural gas and electricity prices. At present, around 6,300 companies are surveyed on their sales prices for a total of 1,343 representatively selected types of goods. The index is based on around 10,000 individual price series.

The PPI is an early indicator of consumer prices and inflation. Compared to the Consumer Price Index (CPI), it is a more accurate, leading indicator: if producer prices rise, consumer prices will rise accordingly. These two indicators are closely linked. The consumer price index is used to forecast inflation. Some components of the PPI are used to calculate GDP.

The Producer Price Index (PPI) m/m of manufacturing industry or producer reflects the average change in producers' sales prices of goods during the reference month compared to the previous month.

When producer prices rise, this almost always indicates an increase in inflation. This and a value above expectations can be seen as positive for the euro rates.