BMag Signal · In 30 seconds
Critical readWhat happened. Numbers are key. From June to September, production prices have significantly increased, surpassing what happened in 2022. This progression has had a direct impact on electric, gas, and oil production, causing a significant increase of approximately 14% for electricity and 90% for oil.
The collapse of economic logic and the need for a drastic reaction begins with the rise in prices based on production, with an increase of approximately 39% for electricity and 90% for oil. These figures highlight the extent of this crisis, which had not been seen for so long. Energy has become the main cause of this increase, with updates to the cost of natural gas and oil that occurred during the war in Iran. In industrial sectors, the largest price increases are recorded in manufacturing phases, first chemical (+9.9%), metallurgy (+7.4%), and rubber-plastic (+5%). At the same time, prices within manufacturing have been limited, with an average increase of 3.5%, slightly above August's data.
Reducing prices is particularly important in the food sector, where annual prices have even fallen by 1.4%. The rise in September's production costs, almost three points higher than the previous month, with an annual increase of 13.8%, confirms what purchasing offices of companies already see on a daily basis, with price spreads expanding across multiple sectors. The energy sector has continued to be the point of strength for rising prices, with electricity and gas production prices soaring by 39%. Chains of tools and materials have been directly impacted, causing significant increases of around 6.6% in terms of trend. Additionally, roads and railways have also been involved in the collapse of prices, with rises of 0.6% in terms of conjunctural figures and 6.6% in terms of trend.
This impact is due to the arrival of new inflationary shocks, such as the war in Iran, which has led to an increase in the value of European natural gas prices more than three times what it was just twelve months ago. The arrival of this new inflationary shock is also visible in the ISTAT figures on enterprises’ revenues (in this case for August), where there is a divergence between prices and production costs, highlighting the need for a radical reaction to face this economic crisis. However, despite these increases, there are still areas of calm, such as food, which has maintained only a limited annual increase of 3.5%. This is why it is important to look for alternative solutions to fossil energy sources, such as could be electric energy sources or the search for new technologies that can drastically reduce production costs.
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