The PPI challenge
Aug 22, 2022
German PPI, measuring producer prices for industrial products, were up a stunning 37.2% y-y-o-y in July. Energy prices that more than doubled are the main culprit, however even without energy, prices were up 14.6%. This is a major obstacle for the German economy as it will continue to feed through to the consumer who is already losing confidence. Also the competitiveness of the German industrial sector that is heavily relying on cheap energy is at risk. We continue to stay defensive in our equity investments with all the challenges ahead.