German Companies’ Price Expectations Increase Slightly after Twelve Consecutive Declines

The so-called price expectations of German companies have increased slightly again for the first time after twelve consecutive monthly declines.

A survey by the Ifo Institute suggests that inflation could prove tough. The so-called price expectations of German companies have risen slightly again for the first time after twelve consecutive monthly declines, as the Munich economic researchers announced on Friday. “It will probably take some time before the inflation rate reaches the European Central Bank’s two percent target,” said Ifo economics chief Timo Wollmershäuser.

Price expectations rose from 14.7 to 15.8 points in September. According to Ifo, the catering industry in particular rose by 13.7 to 62.8 points, while in retail the value fell from 33.6 to 31.4 points. The index is calculated by subtracting from the proportion of companies that want to increase prices the proportion of companies that want to reduce prices. The amount of the planned price changes does not matter.

However, expectations are particularly low in the construction industry. “Because of the downturn, more and more companies there want to lower their prices,” said Wollmershäuser. Price expectations there fell by 2.4 to minus 12.6 points. In the manufacturing sector, the value of 4.6 points is close to the limit at which price increases and decreases would be balanced. (APA)