Source:Eurostat

5 JULY 2011

PRODUCER PRICES turned negative and fell -0.2% in May month-on-month as energy prices -1.1% dip reflected the region's lesser industrial activities and energy demand due to lingering debt concerns on top of the US economic slow down. Brent crude oil prices fell -6.9% to USD 115.1 according to national statistics, and -6.1% to € 80.3. Intermediate Goods producer prices, a 30% share of overall producer prices (energy is 24.4%) stayed nearly unchanged or +0.2% as non ferrous metal prices drop, -4.8% in May, and ferrous metals stable index arched over petroleum derived goods price cuts.

Capital Goods producer prices (22% share) remained unchanged along with Durable Consumer Goods producer prices (2.7% ) while Non Durable edged up +0.3% (21% share).

Among the Euro area's major economies, Germany's domestic producer prices index stayed flat at 115.8 (France‘s was 115.3). In Italy, the prices index, at 117.9 edged down -0.2% and in Spain at 123.8, -0.3%. Five countries recorded steep producer prices hikes including Ireland +1.2%, Denmark +1.1%, Latvia +1.3%, Lithuania +1.2% and Cyprus +1.8%.

In  the UK, the Union's fifth largest economy besides the Euro area's four including France, the index was 146.7 and fell -1.1%. Sweden's producer prices dipped equally, in Greece -1.4% and in Portugal -0.1%.

In one year, overall producer prices inched down to +6.2% as energy prices were cut by over two percentage points to +11.9%, a noticeable decline compared with Brent crude oil prices +52% gain expressed in currency on the same period and +33% in Euro.  Intermediate Goods producer prices rescinded to +6.6%, their December levels, a mechanical back step due to this month temporary relief. By contrast, Capital Goods producer prices stayed on the increase for the sixth consecutive month  and climbed +1.2%. Durable Consumer Goods producer prices performed equally and grew +1.9% and Non Durable Consumer Goods +3.7% due to food prices constant rise.     

In Germany and in France on the same yearly period, overall producer prices jumped +6%, Italy's a more subdued +4.8% while Spain's soared +6.7%. In the UK, a weak GB pound inflated domestic producer prices to +11.9, the Union‘s record high increase by the same token.