German Producer Prices Increase on Energy and Raw Materials

Oil prices averaging more than $60 a barrel since the middle of last year have boosted energy costs for companies, increasing concern they may feed through to consumer prices. The European Commission cut its euro area growth forecast on April 12 as rising oil prices force consumers to spend more on energy.

“German companies are really starting to feel the squeeze,” said Joerg Lueschow, an economist at WestLB in Duesseldorf. “Because of sluggish consumer spending in Germany, they haven’t had the opportunity to pass on the increased costs, so until that picks up, there is going to be a temporary hit on margins.”

Bloomberg