Eurozone producer prices fell in June as lower energy costs outweighed continued increases across most other industrial sectors, suggesting pipeline inflation eased but remained far from disappearing. Industrial producer prices declined -0.3% m/m, matching expectations and reversing May’s 0.2% increase, while the annual rate slowed from 5.9% to 4.6%. The figures largely reflected the period of lower oil prices during June before renewed volatility in energy markets emerged in July.
The decline was driven almost entirely by the energy sector, where producer prices dropped -1.5% m/m. By contrast, underlying price pressures remained positive across much of the industrial economy. Intermediate goods prices rose 0.3%, while capital goods and durable consumer goods each increased 0.2%. Excluding energy, producer prices actually rose 0.2%, indicating that manufacturing cost pressures continued to build despite the headline decline.
The data broadly reinforce the message from this week’s PMI surveys that inflation pressures are moderating. Slower producer price growth should offer some reassurance for the ECB, but the persistence of positive ex-energy inflation suggests underlying pricing power remains intact. With oil prices having rebounded after June before easing again this week on renewed hopes of a Strait of Hormuz agreement, policymakers are likely to view the report as evidence of gradual disinflation rather than a decisive turning point.
Data Summary
| Indicator | June 2026 | May 2026 | Trend |
|---|---|---|---|
| PPI M/M | -0.3% | +0.2% | ▼ First monthly decline since February |
| PPI Y/Y | 4.6% | 5.9% | ▼ Annual inflation eased |
| PPI Ex-Energy M/M | +0.2% | +0.7% | ▲ Underlying prices still rising |
| Intermediate Goods M/M | +0.3% | +1.4% | ▲ Positive but slower |
| Energy M/M | -1.5% | -1.0% | ▼ Main drag on headline |
| Capital Goods M/M | +0.2% | +0.3% | ▲ Continued increase |
| Durable Consumer Goods M/M | +0.2% | +0.3% | ▲ Continued increase |
| Non-Durable Consumer Goods M/M | 0.0% | -0.1% | ► Stable |
Key Takeaways
- Eurozone producer prices fell 0.3% m/m in June, exactly in line with expectations, while annual producer inflation slowed to 4.6% from 5.9%.
- The decline was almost entirely driven by a 1.5% fall in energy prices, reflecting the period of lower oil prices during June.
- Underlying pipeline inflation remained intact. Producer prices excluding energy rose 0.2%, while intermediate goods, capital goods and durable consumer goods all recorded monthly increases.
- The report reinforces this week’s PMI surveys, which also showed easing—but not disappearing—cost pressures across the Eurozone.
- As the data predate July’s renewed volatility in oil markets, policymakers are likely to treat the report as backward-looking while continuing to monitor the impact of recent geopolitical developments on energy prices.
- Overall, the release supports the view of gradual disinflation rather than a collapse in producer price pressures, leaving the ECB room to remain patient.
Full Eurozone PPI release here.
