Fewer German Companies Plan to Increase Prices
Fewer German companies are planning to raise their prices soon than in the previous month, finds the ifo Institute’s latest survey. For the economy as a whole, the ifo price expectations fell to 46.7 points in November, down from 51.3 (seasonally adjusted) points in October. Looking ahead to the Christmas season, however, significantly more toy retailers (94.4 points) report that they intend to increase their prices than in the previous month (75.4 (seasonally adjusted) points). Particularly large numbers of food retailers (95.1 points) and stationers (96.1 points) are also planning increases, as are drugstores (92.4 points) and clothing manufacturers (91.9 points).
Compared to the previous month, the hospitality sector is much less likely to push up prices (58.2 points vs. 80.5* points). Bicycle retailers (64.5 points, down from 81.9*), textile manufacturers (36.0 points, down from 50.3*), and printing companies (47.4 points, down from 60.0*) are also less likely to plan on raising their prices. The paper industry (down to minus 10.7 points from plus 26.0* points) is even planning for falling sales prices.
Retail overall is planning fewer increases at 50.6 points, down from 62.4* points the previous month. Price expectations in the manufacturing sector are also falling, from 56.9* to 53.7 points. The other two sectors are less likely to be planning to raise their prices as well: for service providers, the index fell from 47.0* to 41.4 points, and for the construction industry, from 43.1* to 39.0 points.
The points for the ifo price expectations indicate the percentage of companies that intend to increase prices on balance. The balance is obtained by subtracting the percentage of companies that want to lower their prices from the percentage of those that want to raise their prices. If all the companies surveyed intended to increase their prices, the balance would be plus 100 points. If they all wanted to lower their prices, it would be minus 100. The balance was seasonally adjusted. The ifo Institute does not ask about the amount of the planned price change.
