Producer prices of industrial products increases by 19.6% YoY in the domestic market in October, driven by the increases in the energy sector. However, when excluding the energy sector, this increase amounts to only 3.5%.
Croatian Bureau of Statistics delivered new data on trends in the industry sector on November 9th, showing that the industrial producer price index went up by 19.6% YoY in the domestic market in October 2021. However, when excluding the energy sector, this increase amounts to only 3.5%.
This smaller amount is supported by other sectors of the industry; for example, food production sector prices went up by 3%, beverage production sector prices went up by 1%, equipment production sector prices went up by 1.7%.
With the current increases in the price of natural gas needed for energy production driven by the increased demand in the Asian markets, the political situation in Europe, and similar international events, this all has a upward pressure on the prices of the energy sector in the domestic market.
Even with all these pressures, the sector index CROBEXindustrija managed to achieve a Year-to-Date (YTD) growth of 18%, mostly driven by Saponia (90% YTD), Končar (29% YTD), Ericsson NT (23% YTD).
Even when looking at the largest indexes in Croatia like CROBEX and CROBEX10, both of these indexes experienced a YTD increase of 15% and 13% respectively.
In the end, one should take into account that the producer prices take an average of the industries, and even though an increase of almost 20% can seem like a lot in a year, when broken down into the actual drivers of this increase, we can see a different story. The prices of natural gas are among others, the main driver of this energy price increase, which is material only for a few companies like Ina, Petrokemija, i.a. But when we take into account that energy sector does not represent the majority of companies in the Croatian market, we can conclude that such a strong increase in producer prices is not so material.
Producer prices of industrial products for each month (% YoY)
