Production costs increased by 2.0% in 2007

According to the Federal Statistical Office, the production cost index for industrial products increased on average by 2.0% in 2007 as compared to the previous year. This increase is significantly smaller than that in 2005/2006 (+5.5%). In December 2007, however, prices were 2.5% higher than in December 2006.

While prices increased only moderately over the first nine months in 2007, the increase accelerated in October and November (+0.4% and +0.8% as compared to the previous months respectively) and then decreased slightly in December (-0.1%). The contribution of several product groups to the 2007 overall inflation rate of 2.0% turned out to be quite different.

The prices for intermediate inputs had the most important impact on inflation. These became by 4.1% more expensive as compared to 2006. Particularly the price for fodder increased strongly by 27.8%. Metals and semi-finished products thereof became 7.1% more expensive.

Consumer goods were more expensive too in 2007. The prices thereof increased by 2.5% and in December 2007 these were even 3.8% more expensive than in December 2006.

Energy prices increased by just 0.2% on average in 2007. At the beginning of 2007 they increased just slightly, but in autumn there was a sharp rise. In December they fell again. In December 2007 energy prices were 3.3% higher than in December 2006.
Prices for mineral oil products increased by 2.4%. For electricity consumers had to pay 1.6% more than in 2006. In December 2007 electricity was 8.2% more expensive than in December 2006.

Prices for natural gas fell by 2.6% on average in 2007. However, this decrease did not apply equally to all kinds of natural gas customers. Thus, prices for local utility companies e.g. fell by 6.1% and for industrial customers by 0.3%. Private customers, however, had to pay 3.0% more than in 2006. Natural gas cost 7.9% less in December than one year earlier.

Without taking into account energy prices, production costs increased by 2.7% in 2007 as compared to the previous year. In December 2007 they were 2.2% higher than in December 2006.

Significant price rises were registered for the following product groups: diesel fuel (+18.4%), hard coal (+15.0%), glass and glassware (+4.2%), publishing products (+3.8%), chemical raw materials (+3.7%) and machines (+2.0%). Cheaper, however, were data processing devices and equipment (-29.0%), lead, zinc and tin (-21.7%) as well as electronic components (-14.7%).

With regard to the price development from November to December 2007, particularly lower prices were registered for the following products: lead, zinc and tin (-16.5%), powdered milk (-6.9%), non-metallic secondary raw materials (-6.3%), butter (-3.8%) and mineral oil products (-2.1%). On the other hand, hard coal was +6.4% more expensive, fuel oil +2.0% and prices for daily newspapers and natural gas increased by +1.1% and +0.5% respectively. GERMAN