In a recent report by Statistics Sweden (SCB), it was revealed that the Producer Price Index (PPI) experienced a 0.7 percent decline in August 2023 when compared to July of the same year. The report also highlighted notable reductions in both export and import prices, by 1.4 percent and 1.7 percent, respectively. Interestingly, domestic prices remained unchanged during the same period. When compared to August 2022, the Producer Price Index demonstrated a substantial drop of 5.9 percent, following a 2.1 percent decrease in July.
Maria Bäckström, a price statistician, attributed these changes to a remarkable 37.5 percent decrease in prices for energy-related goods when compared to the same period in the previous year. This decline was evident in both the Producer Price Index and the Domestic Supply Price Index.
Key Highlights:
- Currency Impact: The report emphasized that currency fluctuations played a significant role in these price changes. The Swedish Krona strengthened against both the US Dollar and the Euro during August, according to exchange rates provided by the Swedish Customs. This strengthening had a downward impact on both export and import prices.
- Petroleum Products: Prices for refined petroleum products continued to rise across all markets.
- Consumer Goods: The annual rate of change for consumer goods within the Domestic Supply Price Index decreased from 11.2 percent in July to 9.2 percent in August.
Monthly Changes:
- On the domestic front, lower metal prices and electricity trading contributed to price reductions. Additionally, paper and paper products, as well as motor vehicles, trailers, and semitrailers, also saw price declines. These decreases were offset by higher prices for refined petroleum products, waste management services, and electrical equipment.
- In the export market, the largest negative contribution came from reduced prices for chemicals and chemical products. Prices also fell in several other product groups, including paper and paper products, other machinery, motor vehicles, trailers, and semitrailers, metals, and more. These declines were counteracted by price increases for refined petroleum products and iron and steel.
- The import market witnessed price declines in computers, electronic goods, and optics, which had the most significant negative impact. Prices also dropped for other machinery, chemicals and chemical products, food, metals, and other product categories. Nevertheless, these decreases were balanced by price increases for refined petroleum products and crude oil.
Annual Trends:
- The annual change for the domestic market in August was -9.3 percent, down from -5.4 percent in July. For the export market, the annual rate was -1.9 percent during the same period, compared to 1.7 percent in July. Import prices experienced an annual rate of -3.2 percent in August, compared to -0.5 percent in July.
- When examining the annual change in the Producer Price Index, it stood at -5.9 percent in August. Prices for energy-related goods experienced a significant decrease of 37.5 percent compared to the previous year. In contrast, consumer goods increased by 7.0 percent, and investment goods rose by 8.1 percent. Excluding energy-related goods, the annual change for the Producer Price Index was 3.0 percent.
- The annual change for the Domestic Supply Price Index in August was -6.1 percent, down from -5.4 percent in July. Energy-related goods experienced a similar decrease of 37.5 percent compared to the previous year. Consumer goods increased by 9.2 percent, and investment goods rose by 7.2 percent. Excluding energy-related goods, the annual change for the Domestic Supply Price Index was 4.1 percent.
Currency Exchange:
- Swedish Krona displayed a strengthened position against major trading currencies during August. Notable changes include a 2.5 percent strengthening against the Danish Krone, a 2.4 percent strengthening against the Euro, and a 3.9 percent strengthening against the British Pound. The US Dollar also saw a 5.3 percent strengthening against the Krona during the same period.
These findings illuminate the intricate dynamics of Sweden’s pricing landscape, influenced by both global economic trends and domestic currency performance. As Sweden navigates these changes, businesses and consumers alike will need to adapt to the evolving economic landscape.