Raw material costs rise, German wholesale prices hit new highs.
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Official data released on Monday indicated that German wholesale prices jumped 16.6% year over year in November, the highest yearly increase since data gathering for the indicator began in 1962, implying that higher consumer prices may follow.
Because wholesale commerce represents the link between manufacturers and end- customers, the price measure is frequently seen as an indicator of future inflationary tendencies.
“The high rates of change for wholesale prices in annual comparison derive from increased prices for raw materials and intermediate products,” the Federal Statistics Office said in a statement.
Increased prices for mineral oil goods, which surged 62.4 percent year over year, had the greatest impact on the yearly measure.
The cost of intermediate items has been pushed up by supply chain constraints. According to a poll released last month, more than half of German businesses doing business abroad are experiencing major problems with their supply chains or logistics, forcing them to diversify suppliers, cut delivery routes, and even shift their own manufacturing.
In November, German consumer prices jumped 6.0 percent year on year, putting pressure on the European Central Bank to act. German consumer prices are harmonised to make them comparable with inflation data from other European Union countries.
Olaf Scholz, Germany’s new chancellor, stressed last month, just before entering office, that very high inflation rates must be properly monitored. In November, wholesale prices increased by 1.3 percent month over month.
Story by : Norvisi Mawunyegah