Industrial prices in May experienced a notable decline compared with the same month in the prior year, driven largely by energy costs and a broader easing across related sectors. The National Institute of Statistics reported a 6.9% year-over-year drop, which sits about 2.5 percentage points below April’s rate. This shift marks a continuation of a gentle downward trajectory that began earlier in the year as energy markets cooled and production costs softened across the economy.
Against the backdrop of the annual movement, the industrial inflation rate also turned negative on a quarterly basis after a long run of increases that extended for more than two years. The last time prices had shown a sustained rise was late in the previous cycle, and May confirms a renewed pattern of deflationary pressure within the industrial sector.
The energy component was the principal driver of the May decline, contributing four fifths of the total drop and dragging prices down by about 24.9% year over year. This pronounced decrease resulted from cheaper refinery inputs and a softer electricity generation landscape, with energy prices in transportation and distribution also easing. Gas prices followed a similar downward path, falling more than they did in May of the previous year. These dynamics collectively pulled the overall industrial price level lower.
Intermediate goods also played a significant role, trimming the annual inflation rate by around 2.5 percentage points to minus 4%. Price declines were evident in basic iron and chemical products, as well as in non-durable consumer goods manufactured for daily use, each contributing to the broader cooling trend. The softening in these categories helped offset any marginal gains elsewhere in the industrial chain, especially in sectors with high input costs and sensitive pricing structures.
On the positive side, the sole sector contributing to inflation remained capital goods, which retained a 3.6% rise. This uptick was primarily driven by stronger pricing in motor vehicle manufacturing relative to the prior year, underscoring a divergence within the industrial mix where durable goods continued to post inflationary pressure even as other sectors cooled.
When viewed from a monthly perspective, May shows a 1.6% drop in industrial prices from April, continuing a sequence of declines that began in March with a 2.5% slide and persisted into April at 1.9%. The monthly pattern reinforces the slower demand environment and the dampening effect of lower energy costs on overall production pricing across the sector.
As May’s monthly movement unfolds, energy remains the most influential factor, contributing a sizable decline of 4.9%. Following energy, intermediate goods posted a milder reduction of about 1%. In contrast, non-durable goods recorded a modest price increase of 0.4% from April to May, driven by higher prices in the manufacturing of oils, fats, and meat products. These shifts illustrate a nuanced balance within the economy where certain consumer-oriented segments experience price gains even amid broader deflationary forces in the industrial sector, reflecting changes in input costs and production dynamics.