More German companies are now planning higher prices than ever. In March, the Ifo price‑expectation indicator rose to 25.3 points from 20.3 in February, the highest level since March 2023.
“Price pressure in Germany is becoming noticeably stronger again” said Klaus Wohlrabe, head of the Ifo surveys. “The high energy prices are likely to push inflation further in the coming months”. He linked the recent rise in expectations to sharply higher prices for crude oil, gas and electricity, a consequence of the war in the Middle East. The energy component had previously dampened inflation; a reversal is now apparent. “Companies are increasingly passing on higher costs” Wohlrabe noted. “Increased production and transport costs, amplified by energy prices, will also affect the cost of goods and services”.
The steepest climbs in expectations were seen in industry, where the index jumped from 13 to 20 points. Construction firms saw their expectations rise from 10 to 20.2 points. Consumer‑focused services pushed up from 25.1 to 31.6 points, and business‑oriented services-including wholesale-tipped from 24.7 to 27 points. Together, these results indicate a renewed pressure on prices across many sectors.
In the Ifo system, points represent the net proportion of companies that intend to raise their prices versus those that plan to lower them. A full 100 points would mean every surveyed firm wants to increase prices; -100 would mean all want to cut them. The figure is seasonally adjusted, and the institute does not ask for the magnitude of the planned price change.