German Companies Planning Slight Price Increases, Especially Among Retailers and Consumer-Related Service Providers

(Munich) – The price expectations of German companies for the coming months have risen slightly. This is the result of a survey by the ifo Institute. They rose to 16.4 points in July from 16.3* in June. “For the first time since October 2022, the proportion of companies that want to raise their prices on balance has not decreased further,” says ifo economics chief Timo Wollmershäuser. A growing majority of the companies surveyed are planning further price increases, especially among retailers (34.8 points after 32.9*) and consumer-related service providers (32.9 points after 32.7*). “This means that the decline in domestic inflation in particular is likely to continue,” adds Wollmershäuser.

The price expectations in the individual consumer-related areas are developing very differently. Food retailers in particular are planning more increases (54.9 points after 43.0* in June) and stationery retailers (60.1 points after 58.5*). In gastronomy, too, prices are likely to rise faster again (48.5 points after 33.5*). On the other hand, the hotels plan higher prices somewhat less often (31.0 points after 32.6*). The same applies to the prices of drugstore items (40.1 points after 56.2*). Only bicycle buyers can expect price reductions (minus 26.7 points after plus 1.0*).

“In contrast to the consumer-related areas, the price increase in the manufacturing sector should have stopped by now,” says Wollmershäuser. In manufacturing, price expectations fell to 4.1 points, after 6.0* in June. Here, too, the development is not uniform. The car industry is increasingly planning price increases (35.6 points after 24.9*). The manufacturers of EDP devices, on the other hand, only want to increase their prices less often (13.3 points after 31.1*). Among others, the paper industry (minus 53.8 points after minus 52.3*) and the chemical industry (minus 27.4 points after minus 33.3*) are planning falling prices. Prices in the construction industry are also likely to fall further (minus 8.1 points after minus 5.2*).

The points in the ifo price expectations indicate what percentage of companies want to increase their prices on balance. The balance is obtained by subtracting the percentage of companies that want to lower their prices from the percentage of companies that want to raise their prices. If all companies surveyed intended to increase their prices, the balance would be plus 100 points. If everyone wanted to lower their prices, it would be minus 100. The balance has been seasonally adjusted. The ifo Institute does not ask about the amount of the planned price change.

* Corrected seasonally adjusted

Source and contact address:
Ifo Institute – Leibniz Institute for Economic Research at the University of Munich eV Press Office Poschingerstr. 5, 81679 Munich Telephone: (089) 92240, Fax: (089) 985369

(jg)