German industrial products sold at producer level cost an average of 6.7% more in September than a year earlier. Energy prices rose by 14.9% and intermediate goods by 6.4% over the same period. The index excluding energy increased by 3.2%. Non-durable consumer goods moved in the opposite direction, with producer prices falling by 1.8% year on year.
The overall rate is therefore only a starting point for a purchasing department. A business buying energy-intensive components faces a different cost environment from a distributor buying finished consumer goods. Even within the same supply chain, the price of a component need not move in step with the selling price of the finished item.
The producer index records an early stage of that chain. Transport, distribution and individual pricing decisions can all affect the amount eventually paid by households. Translating a change at the factory gate directly into the next change on a shop shelf would skip those separate decisions about who absorbs a higher or lower cost.