Headline: Germany’s October Producer Prices Nudge Higher Month-on-Month, Remain Lower Year-on-Year
Key Takeaways
Germany’s factory-gate prices in October ticked up slightly, signaling stabilizing cost pressures across industry even as annual inflation at the producer level remains negative. The latest Producer Price Index (PPI) readings suggest energy remains the main drag on headline inflation, while underlying price trends are firmer.
According to Destatis, PPI rose 0.1% month-on-month in October, beating expectations for a flat reading after a 0.1% decline in September. On an annual basis, producer prices fell 1.8%, a drop that was less pronounced than forecast but still deeper than September’s 1.7% decline. Excluding energy, PPI increased 0.8% year-on-year and slipped 0.1% versus September, indicating core pipeline pressures are modest.
Price dynamics were mixed across categories: energy and intermediate goods were cheaper than a year earlier, while capital goods, non-durable consumer goods, and durable consumer goods posted gains. Overall, the data point to subdued pipeline inflation, reinforcing the view that the European Central Bank is unlikely to adjust its policy stance on the back of this release alone.
Key Points: – Germany’s PPI rose 0.1% m/m in October 2025, versus 0.0% expected – Annual PPI fell 1.8% y/y, compared with a 1.9% decline expected and -1.7% prior – Ex-energy PPI: +0.8% y/y and -0.1% m/m – Energy remains the main driver of the year-on-year decline in producer prices – Intermediate goods were cheaper y/y; capital and consumer goods categories increased – Data imply subdued pipeline inflation and little immediate impact on ECB policy expectations
