Eurozone Producer Prices Fall At Record Pace In June

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Eurozone producer prices registered a record annual fall in June on energy costs, indicating more consumer price easing in the pipeline.

The European Union's statistics office Eurostat said in a report that industrial producer prices dropped by a record 6.6% year-over-year in June compared with a 5.9% fall in the previous month. The May figure was revised from a 5.8% decline reported initially. The annual decline came in line with economists' expectations.

On a monthly basis, producer prices increased 0.3% in June, after a flat reading in May. The increase was slightly more than the 0.2% anticipated by economists. The statistical office upwardly revised the 0.2% fall estimated initially for May.

According to the Luxembourg-based statistics agency, producer prices in EU27 was up 0.2% in June from the prior month. Annually, the index slipped 6.7%, severe than the 5.5% decline seen in May.

Among member states for which data are available, the largest annual falls in the total index were reported in the Netherlands with a 13.2% slump, followed by Denmark and Belgium. The only increases were registered in Malta, Hungary and Romania.

Excluding the energy sector, prices in the industry fell 3.5% in June from the same period of last year. Prices in the energy sector plummeted 15% in June, while in the intermediate goods and non-durable consumer goods, they dropped 6.4% and 2.9%, respectively. These declines were partially offset by a 0.3% rise in capital goods and 1.5% increase in durable consumer goods.

Consumer price inflation stayed negative for the second month in July with prices falling 0.6% on an annual basis. The decline in July was the biggest on record after declining 0.1% in June.

The monthly survey conducted by Markit Economics showed that the slowdown in the euro area manufacturing activity decreased more than initially estimated in July, signaling a possible end to the recession. The manufacturing Purchasing Managers' Index rose to an 11-month high of 46.3 in July from 42.6 in June.

Eurozone producer prices registered a record annual fall in June on energy costs, indicating more consumer price easing in the pipeline. (Market News Provided by RTTNews)