By Geoffrey Smith
Investing.com -- German industry's problems got a lot worse in July, as energy shortages and lingering post-pandemic effects drove a new surge in producer price inflation.
Factory gate prices rose a whopping 5.3% on the month, the biggest single gain since the Federal Republic started compiling its data in 1949. Prices were up 37.2% on the year, badly disappointing hopes for a slowdown to 32.0%.
Statistics office Destatis said energy prices more than doubled from a year earlier, as Russia throttled supplies of natural gas in response to European sanctions on it for the invasion of Ukraine. In particular, power stations had to pay 234% more than in July 2021 for natural gas, which had to be sourced on the spot market after Russian export monopoly Gazprom (MCX:GAZP) cut shipments to zero for much of the month. They have run at only 20% of their contracted level since the end of scheduled maintenance.
In a similar vein, electricity prices for distributors more than tripled.
Excluding energy prices, Destatis said producer prices rose 0.4% on the month and 14.6% on the year.