Euro area producer prices in July 2021 reached an all-time high of 113.4 (index 2015 – 100). Costs of durable and non-durable goods were each up 0.3% month-on-month and 2.3% year-on-year, while capital goods, such as machinery, were 0.4% higher than in May and 2.0% higher than in June 2020.
This is a new record but also far higher than expected, increasing inflationary pressures on consumers. There are several contributory factors linked to this increase including the increased price of energy (July price rise was 5.5% month-on-month); the increased costs of inbound materials from both import costs (linked to current international freight costs); and domestic factors of production costs including labour costs, efficiency impacts from ongoing pandemic impacts and escalating costs around labour supply.
This is certainly something to keep an eye on as consumers will ultimately feel the immediate effects, directly in their wallets.