Euro Area Annual PPI Decelerates In June As Energy Prices Fall

--June EMU PPI Falls 0.1% On Month, Up 2.5% on Year

By Shaily Mittal

     LONDON (MNI) - Euro area industrial producer prices fell by 0.1% in June

compared with May, easing slightly, following a revised fall of 0.3% in May.

     On an annual basis, euro area industrial producer prices rose by 2.5% in

June, following a rise of 3.4% in May (revised up from 3.3% previously), making

it the weakest annual growth since December 2016 when prices grew by 1.6% on the

year.

     In the European Union as a whole, producer prices eased by 0.2% on the

month in June and grew by 2.6% compared with June last year, the lowest since

December 2016.

     On a monthly basis, June's decline across the euro area was predominantly

led by the energy sector, which saw a price fall of 0.3% m/m, marking the fifth

consecutive month of contraction. Prices of intermediate goods fell by 0.2% on

the month, making it the second straight decline. Prices remained stable for

durable consumer goods and they increased by 0.1% for capital goods and by 0.2%

for non-durable consumer goods.

     Prices in total industry, excluding energy, did not change in June compared

with May. Declining producer prices on a monthly basis, and weaker price growth

on an annual basis, appear to indicate the fragile position of the

manufacturers/producers owing to modest demand.

     The largest monthly declines in industrial producer prices in the euro area

were recorded in Greece (-1.3%), the Netherlands (-1.1%) and Ireland (-1%).

Among the largest nations in the euro area, Germany saw no change in prices

following a decline of 0.1% in May, while France's industrial prices continued

to decline, falling for the fifth consecutive month.

     On an annual basis, industrial producer prices grew at the fastest pace in

Belgium (6.4%), Cyprus (5.7%) and Latvia and Spain (both at 3.2%). Germany and

France continued to exhibit growth in prices, but at a decelerating pace.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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