The proportion of companies in Germany planning to raise their prices has recently decreased. The Ifo Price Expectations index dropped in June to 26.4 points, a fall from 30.0 points recorded in May.
Ifo Economics Director Timo Wollmershäuser noted that falling energy prices, combined with growing hopes for peace in the Middle East, appear to have made businesses more optimistic about the economic situation. Nevertheless, he cautioned that producer and consumer prices are still expected to rise in the coming months. Current price expectations remain significantly higher than the average of 18.3 for the 2023 to 2025 period.
Sector by sector, the decline was noticeable. For energy-intensive companies, the indicator fell sharply from 41.2 to 30.2 points. Similarly, the price pressure eased somewhat for non-energy-intensive companies, moving from 30.3 to 27.1 points. In the service and retail sectors, price expectations dropped from 25.0 to 21.4 points for services, and from 48.7 to 42.2 points for commerce. The general manufacturing industry also saw its index fall to 28.5 points, down from 31.6 in May.
Food manufacturers, in particular, plan much less frequent price hikes, with the indicator dropping markedly from 19.6 to 12.7 points. While the price pressure in food retail trade weakened slightly from 55.3 to 48.5 points, it remains elevated. To clarify the metrics used, the Ifo Price Expectations points indicate the percentage of companies intending, on balance, to increase their prices; a score of +100 would mean all surveyed companies intend to raise prices, while −100 would mean all intend to lower them.
