| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | 0.2% | 0.2% to 0.7% | 0.2% | 0.6% | 0.7% |
| Year over Year | 5.5% | 4.7% to 5.8% | 5.9% | 4.9% | 5.0% |
Highlights
Euro area industrial producer prices continued to rise in May 2026, signalling persistent upstream inflationary pressures despite a moderation in monthly price growth. Producer prices increased by 0.2 percent from April, down from the 0.7 percent rise recorded in the previous month, indicating that cost inflation is easing but remains elevated.
The monthly increase was driven primarily by intermediate goods (1.4 percent), reflecting sustained input cost pressures across manufacturing supply chains, while energy prices fell by 1.0 percent, helping to moderate overall price growth. Capital goods and durable consumer goods also recorded modest increases, whereas non-durable consumer goods declined slightly.
On an annual basis, producer prices rose by 5.9 percent, underscoring the continued inflationary environment facing producers. Energy remained the dominant driver, with prices surging by 14.0 percent, highlighting the sector's ongoing influence on industrial cost structures despite recent monthly declines. Excluding energy, producer prices increased by a more moderate 2.8 percent, suggesting that underlying inflationary pressures remain broad-based but increasingly manageable.
In summary, the latest report suggests a gradual normalisation of producer price inflation. However, elevated energy and intermediate goods costs continue to pose challenges for manufacturers, potentially sustaining pressure on corporate margins and delaying a broader easing of consumer price inflation across the euro area. These updates take the RPI to 10 and the RPI-P to 31, meaning that economic activities based on the RPI, are now within the expectations of the euro area economy.
Market Consensus Before Announcement
PPI seen up 0.2 percent on month and 5.5 percent on year in May after rising 0.6 percent and 4.9 percent in April.
Definition
The Producer Prices Index (PPI) measures the gross trading price of industrial goods sold into the domestic market. 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. The PPI covers manufacturing, mining and quarrying and utilities but excludes construction. The headline index can be very volatile so financial markets look at a core index to better understand underlying trends. This excludes the often highly erratic energy subsector.
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 HICP. By tracking price pressures in the pipeline, investors can anticipate inflationary consequences in coming months.
Like the HICP, Eurostat's producer price index is also harmonized across the EMU and the larger EU membership. Producer price indexes provide another layer of information on inflation and can be an early warning of inflationary pressures building in the economy. They also record the evolution of prices over longer periods of time. The PPI reports on input prices or commodity prices and can tell whether producers are able to pass through increases in costs to their customers.
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 taking a cut in profits. The ability to pass along price increases depends on the strength and competitiveness of the marketplace.
Producer prices are more volatile than consumer prices. The CPI includes services components which are more stable than goods, while the PPI does not. Commodity prices react more quickly to supply and demand. Volatility is higher earlier in the production chain. Partly because of this, financial markets will look to the core (ex-energy) index to provide a better guide to underlying trends.