Energy Costs Impact Spanish Manufacturing Prices in 2024

(Reuters) – Energy costs lifted Spanish manufacturing prices in 2024 following a contraction in the previous year, as reported by the National Statistics Institute (INE) on Friday.

Manufacturing prices rose 2.3% last year after a 6.3% decline in the year prior, when energy prices fell from a peak in 2022 due to the war in Ukraine, according to INE’s monthly report.

In 2024, prices of oil, gas, and electricity increased 7.5% in Spain after a 20.6% contraction in 2023, INE noted.

After turmoil in energy markets during 2021 and 2022, prompted by the COVID pandemic and the onset of the Ukraine war, industrial price growth in Spain peaked at 47% in March 2022. Companies often pass on industrial price rises to customers, ultimately fueling inflation.

Spain’s annual inflation rate has risen recently, reaching 2.8% in December, after easing to 1.5% in September.

Industrial prices increased 0.9% in December compared to November, and INE revised the year-on-year November price increase up to 1.2% from an initial 0.9% increase.