Monthly Bulletin July 2009 - Banque de France

ECONOMIC
AND MONETARY
DEVELOPMENTS
Prices and
costs
Chart 21 Breakdown of industrial producer
prices
(annual percentage changes; monthly data)
Chart 22 Producer input and output price
surveys
(diffusion indices; monthly data)
total industry excluding construction (left-hand scale)
intermediate goods (left-hand scale)
capital goods (left-hand scale)
consumer goods (left-hand scale)
energy (right-hand scale)
manufacturing; input prices
manufacturing; prices charged
services; input prices
services; prices charged
10
30
80
80
8
6
24
18
70
70
4
12
60
60
2
6
50
50
0
-2
0
-6
40
40
-4
-12
30
30
-6
2004 2005 2006 2007
2008
Sources: Eurostat and ECB calculations.
Note: Data refer to the euro area including Slovakia.
-18
20
2004 2005 2006 2007 2008
Source: Markit.
Note: An index value above 50 indicates an increase in prices,
whereas a value below 50 indicates a decrease.
20
Information from surveys on the price-setting behaviour of firms over recent months indicates,
however, that the pace at which pipeline price pressures are easing is diminishing (see Chart 22).
With regard to the Purchasing Managers’ Index (PMI), the June data show that all indices related
to prices have increased. In the manufacturing sector, the input price index rose substantially, most
likely on account of the month-on-month increases in commodity prices observed in recent months,
while the index of prices charged rose to the highest level seen since January 2009. In the services
sector, the input price index rose for the first time since June 2008, suggesting that the rate of the
decline in the input prices of that sector may have levelled off, while the index of prices charged
in that sector posted a new, small increase. Notwithstanding these rises, the PMI price indices still
signal a fall in prices compared with the previous month, albeit at a lower rate.
3.3 LABOUR COST INDICATORS
The annual rate of growth in negotiated wages eased to 3.2% in the first quarter of 2009, compared
with 3.6% in the last quarter of 2008. Annual wage growth has thus remained elevated in the euro
area on the back of the sharp increases recorded in 2008. The rather resilient trend maintained by
this indicator in the last quarter of 2008 and the first quarter of 2009 can be largely attributed to the
length of collective wage agreements (approximately two years) in the euro area. Indeed, a large
number of labour contracts were concluded before HICP inflation started to decline and economic
activity started to contract in the euro area. However, available information signals that the
annual rate of growth in negotiated wages may have further slowed at the beginning of the second
quarter of 2009 (see Chart 23 and Table 5).
ECB
Monthly Bulletin
July 2009
41