German Manager Magazine: Ifo Institute: More companies want to increase prices, falling price expectations in consumer-related industries002920

A little more companies in Germany want to ask their customers to pay more in the coming months. The barometer for price plans rose from 15.4 points in October to 18 points in November, as the Munich Ifo Institute announced in its economic survey. The increase is primarily due to company-related service providers and wholesalers.

Inflation continues to decline

However, the survey has positive news for consumers: in the Consumer-related industries price expectations fell again. In the Food retail For example, the barometer fell from 40.7 to 34.2 points, in other retail trade from 28.2 to 27.7 points and in consumer-related service providers from 29.3 to 25.5 points. “That’s it inflation continues to decline,” said Ifo economics chief Timo Wollmershäuser. Economists surveyed by the Reuters news agency assume that the inflation rate fell from 3.8 to 3.5 percent in November. That would be the lowest level in around two and a half years.

“The inflation rate is likely to temporarily rise again to around four percent in December,” says Wollmershäuser. Above all, a so-called base effect comes to light here: in December 2022, gas prices for consumers fell sharply because the state covered the costs for the December discount. “But at the beginning of next year the inflation rate will fall to below three percent,” said Wollmershäuser.

Car manufacturers’ price expectations are significantly lower

In industry too, fewer companies want to ask their customers to pay more. There the Ifo barometer fell from 5.8 to 2.5 points. Price expectations among automobile manufacturers in particular fell sharply, from 30.6 to 10.2 points. In the crisis-ridden construction industry, the downward trend slowed somewhat: price expectations rose from minus 9.2 to minus 4.8 points.

The points indicate what percentage of companies want to increase their prices on balance. The balance is obtained by subtracting the percentage of companies that want to raise their prices from the percentage of those that want to lower them.

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