Corporate price expectations have fallen to their lowest level in two years. In the bicycle trade, prices will probably fall. But it will still be a while before consumers are noticeably relieved.
The price expectations of German companies have fallen to their lowest level in two years. The Munich-based Ifo Institute therefore expects price increases to slow down over the coming months.
The monthly index of price expectations fell by 2.5 to 19 points in May, as the economic researchers announced on Friday. It was below 20 for the first time since spring 2021.
In the retail trade with food and beverages, the value is also declining, but at 63.2 it is still significantly higher. “The inflation rate for consumers will therefore only drop very slowly, because price expectations are only falling slowly for many service providers,” said Ifo expert Timo Wollmershäuser.
Significant price reductions are becoming apparent in individual sectors
However, there are also outliers: The number in the bicycle trade fell by almost 50 points to minus 21.8 – this means that the majority of prices will probably fall there. The index consists of the percentage of entrepreneurs who want to raise prices minus the percentage who want to lower prices. The price cuts are also in the majority in construction, where the index fell from 3.9 to minus 6.9.
There are also positive signs from industry, where the index fell from 12.1 to 7.7. In some sectors there were even signs of significant price reductions. “But it will be some time before that gets through to the consumer,” said Wollmershäuser.
Paper manufacturers, chemicals, rubber and plastic goods, glass, ceramics and textiles were among the areas with clearly negative values.
Source: Stern
