More and More German Companies Planning Price Increases
More and more companies in Germany are looking to raise their prices, according to the ifo Business Survey for May. The index saw a rise particularly in wholesale, from 54 points in April to 65 points. “Many companies are passing on price increases they are seeing on the procurement side,” says Klaus Wohlrabe, Head of Surveys at ifo. “There are also some catch-up effects following earlier price cuts during the coronavirus crisis.”
In manufacturing, the index rose from 32 points to 37 points; in construction, it went from 12 points to 32 points. The index is also approaching highs for retail and service providers: in retail, it rose from 24 points to 36 points; in the service sector, it went from 14 points to 20 points. Almost every industry foresees some sort of price increase. “Sharp increases in many commodity prices are ultimately rippling across the entire economy,” Wohlrabe says.
The points are balance points, calculated by subtracting the percentage of companies that want to lower their prices from the percentage of those that want to raise them.
