In September 2023, the industrial producer prices on the domestic market recorded an increase of 0.6% MoM and 1.5% YoY.
Yesterday, the Croatian Bureau of Statistics, DZS, released its latest report on the industrial producer prices, for the month of September 2023. According to the report, the producer prices on the domestic market recorded an increase of 0.6% MoM and 1.5% YoY. Price change excl. Energy amounted to -0.1% MoM, and +2.9% YoY.
Breaking the producer prices down by categories, on a monthly basis, producer prices increased in Energy by 1.9%, in Intermediate goods by 0.3%, they remained stable in Capital goods and Durable consumer goods, whilst they decreased in Non-durable goods, by 0.3% MoM. Meanwhile, on a yearly basis, the largest growth was recorded in Non-durable consumer goods, with 5.5%, followed by Durable consumer goods at 2.2%, Capital goods at 0.6%, and Intermediate goods at 0.3%, while the prices decreased in Energy by 1.1%.
Industrial producer prices YoY growth (January 2021 – September 2023, %)
Source: DZS, InterCapital Research
Furthermore, breaking the producer price change by industrial sections, on a MoM basis, producer prices increased in Mining and quarrying by 6.1%, in Electricity, gas, steam, and air conditioning supply by 0.5%, and in Manufacturing by 0.3%. On the other hand, they remained stable in Water supply; sewerage, waste management, and remediation activities (Water Supply). Turning our attention to the YoY basis, the largest price increase was recorded in Electricity, gas, steam, and air conditioning supply, at 11.3%, followed by Manufacturing at 1.8%, and in Water supply at 0.6%. On the flipside, Mining and quarrying costs decreased by over 50% YoY.
If we were to look at a longer time period, since 2015, total producer prices on the domestic market grew by 47.5%, while if we were to exclude Energy, the growth amounted to 17.6%.
Total industrial producer prices (PPI) growth, growth by categories (September 2023, 2015=0, %)
Source: DZS, InterCapital Research
As we can see in the graph above, by far the largest increase was recorded by Energy costs, which increased by 134% YoY. Other categories recorded between high single-digit growth, to growth just below 20%. Considering that the average inflation rate during this period is slightly above 28%, it would seem that the majority of categories excluding Energy increased way slower than inflation.
With the coming of colder weather and especially winter, there could be some more pressures on prices, especially in the Energy segment. However, the increase in energy prices should not be nearly as high as last year, as the situation on the market and in Europe in general has changed a lot since then. Still, continued price growth in the industry usually spills over to consumers in one way or another, as we’ve seen during the last couple of years, especially after the Russian invasion of Ukraine and the subsequent increase in energy prices.
