In November 2025, the European Union’s Producer Price Index (PPI) for industrial producers recorded a year-on-year decline of 1.3%, marking the steepest drop since mid-2024 and signaling continued easing in industrial inflation pressures. This follows a downward trend over the past six months, with annual PPI changes progressing from 0.2% in June to -1.3% in November. On a monthly basis, however, prices rose by 0.4%, suggesting a slight short-term stabilization despite the broader weakening momentum.
The sustained annual decline in PPI reflects diminishing cost pressures across key sectors, most notably in energy, which saw prices fall by 6.6% compared to the same month last year—by far the largest negative contributor to overall PPI performance.
Energy prices have been a dominant force behind the PPI downturn, reversing earlier inflationary spikes seen during previous years. The sharp year-on-year drop underscores the impact of lower wholesale energy costs, driven by stable global supply and reduced demand amid mild weather and improved energy efficiency across industries. As energy feeds into production costs for nearly all industrial sectors, its deflationary effect has rippled through intermediate goods and contributed to subdued pricing trends even in manufacturing and capital investment.
Other components showed mixed but generally muted movements. Capital goods prices edged up 0.4% year-on-year, indicating modest resilience in industrial investment, while durable consumer goods rose 0.9%, likely supported by steady demand. In contrast, non-durable consumer goods declined slightly by 0.2%, and intermediate goods remained almost flat with a negligible -0.1% change. Together, these figures suggest that while final demand is holding, input cost disinflation remains widespread.
The latest PPI data reinforces expectations that industrial price pressures in the EU will remain contained heading into 2026, with policymakers likely to view the figures as supportive of maintaining current monetary policy settings in the near term.