| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | 0.1% | -0.1% to 0.3% | 0.0% | 0.1% |
| Year over Year | -2.1% | -2.2% to -2.0% | -2.3% | -1.8% |
Highlights
The November 2025 producer price data point to a cooling cost environment for German industry, driven largely by energy price dynamics rather than broad-based deflation. Overall producer prices were 2.3 percent lower than a year earlier and flat on the month, signalling stabilisation after earlier volatility. The headline decline masks a clear divergence across components.
Energy prices remain the dominant disinflationary force, falling 9.0 percent year-over-year, with sharp declines in natural gas and electricity continuing to ease cost pressures for energy-intensive producers. This energy-driven relief explains why, once energy is excluded, producer prices were actually higher than a year earlier, rising by 0.8 percent. In effect, underlying cost pressures have not disappeared; they have been obscured by cheaper energy.
Upstream signals are mixed. Intermediate goods prices edged down annually, reflecting lower chemical and paper prices, yet strong increases in precious metals, timber products, and pellets suggest renewed pressure in selected supply chains. Downstream, capital goods and consumer goods prices continue to rise modestly, indicating that firms are still passing through higher input and labour costs where demand allows.
Overall, the latest data suggest a fragile equilibrium as easing energy costs are cushioning producers, but structural inflationary pressures persist beneath the surface. These updates take the RPI to minus 4 and the RPI-P to minus 1, meaning that economic activities are now within the expectations of the German economy.
Market Consensus Before Announcement
The consensus sees wholesale prices up 0.1 percent on month and down 2.1 percent on year in November.
Definition
The Producer Price Index (PPI) measures the price of industrial and commercial goods produced and sold domestically (excluding turnover tax). About 1,250 types of goods are used to calculate the index and prices are reported by a total of 5,000 enterprises under fixed contractual conditions. Changes in the index provide a guide to inflation from the point of view of the product's producer/manufacturer and, in contrast to the consumer price index (CPI), excludes VAT and other deductible taxed associated with turnover.
Description
The PPI measures prices at the producer level before they are passed along to consumers. Since the producer price index measures prices of consumer goods and capital equipment, a portion of the inflation at the producer level gets passed through to the consumer price index (CPI).
Because the index of producer prices measures price changes at an early stage in the economic process, it can serve as an indicator of future inflation trends. The producer price index and its sub-indexes are often used in business contracts for the adjustment of recurring payments. They also are used to deflate other values of economic statistics like the production index. It should be noted that the PPI excludes construction. These price statistics cover both the sales of industrial products to domestic buyers at different stages in the economic process and the sales between industrial enterprises.
The PPI provides a key measure of inflation alongside the consumer price indexes and GDP deflators. The PPI is considered a precursor of both consumer price inflation and profits. If the prices paid to manufacturers increase, businesses are faced with either charging higher prices or they taking a cut in profits. The ability to pass along price increases depends on the strength and competitiveness of the marketplace.
The bond market rallies when the PPI decreases or posts only small increases, but bond prices fall when the PPI posts larger-than-expected gains. The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.