Industrial prices fell by 8.2% in February compared with the same month in 2023. This extended the year over year decline by 4.3 percentage points from January, driven mainly by cheaper electricity, according to the National Statistics Institute.
With the February year over year drop, the inflation rate for the industrial sector has posted twelve consecutive months of negative rates. This follows the end of a 26 month run of increases in March 2023, during which prices rose at double digits for more than 20 months.
The February trend in industrial prices reflects the drop in energy costs, which reduced the annual rate by 11.4 points to minus 24.2 percent. The decrease was tied to lower production, transportation, and distribution costs for electricity, compared with February 2023. Still, there was a rebound in the price levels for gas production and refined petroleum relative to the declines recorded a year earlier.
Non durable consumer goods also contributed to the downtrend in February, with their year over year rate easing by nine tenths to 4.7 percent. This was the lowest figure since November 2021, reflecting cheaper meat processing and the conservation of meat products. On the other hand, intermediate goods saw a rise of four tenths in the annual rate in February, reaching minus 5.2 percent due to higher input costs for basic chemicals, offsetting some of the declines from the previous year.
The annual variation rate for industrial prices excluding energy stood at 0.0 percent in February, two tenths below January and eight point two percentage points higher than the general index. On a monthly basis, February prices fell by 2.3 percent from January, marking the largest monthly decline since March 2023, also tied to lower energy costs.
Among the activities driving the monthly price reductions, electricity production and distribution accounted for an 18 percent drop. Also notable were price decreases in the manufacture of animal feed products minus 1.3 percent, oils and vegetable and animal fats minus 0.9 percent, and meat processing minus 0.5 percent.
In contrast, the largest monthly increases occurred in refined petroleum products plus 6.8 percent, basic chemical products plus 3.7 percent, gas production plus 0.9 percent, concrete cement and gypsum products plus 2 percent, and rubber product manufacturing plus 3.7 percent.
All regions show declines
According to official statistics, every region ended February with negative industrial price rates. The most pronounced declines were seen in Asturias and the Canary Islands both at minus 28.9 percent, followed by the Balearic Islands at minus 28.1 percent and Madrid at minus 15.1 percent. The more moderate negative rates appeared in the Valencian Community at minus 4.0 percent, Catalonia at minus 4.6 percent, Andalusia at minus 4.7 percent, and Extremadura at minus 4.8 percent.
These figures reflect a broad-based easing in industrial price pressure across the country as February closed, underscoring the impact of energy cost movements on overall inflation in industry. [INE report, 2024 attribution]