Producer Price Index change in major economies 2020-2026

Producer prices in major economies from 2020 to 2026

The Producer Price Index in major economies has diverged sharply since 2020. Producer prices in the United States have risen fastest, while the euro area saw a dramatic spike and fall, and China spent years in deflation before recovering in 2026.

The Producer Price Index, which tracks the prices factories receive at the gate, is one of the earliest signals of where consumer inflation is heading.

On the data, US producer prices rose about 4.7 percent over the year to July 2026, Chinese prices about 3.5 percent after years of deflation, and euro area prices, once up 43 percent in 2022, rose only modestly. Producer prices are watched closely because they move before consumer prices, offering an early read on inflation across the world largest economies.

This overview compares the Producer Price Index across the major economies from January 2020 to July 2026, tracing the surge, the collapse and the fresh uptick, and what drove each. The divergence between the major economies on producer prices, from the US steady climb to China long deflation, is one of the most striking economic stories of the decade.

This overview compares producer prices across the United States, the euro area, Japan and China from January 2020 to July 2026, tracing the surge, the collapse and the fresh energy-driven uptick.

The Producer Price Index is a leading indicator, moving before consumer prices, so its sharp swings since 2020 offered an early warning of the inflation that followed and its later retreat.

Producer prices, the prices that factories receive at the gate, surged right across the world in 2021 and 2022, a shock our monthly EU inflation and inflation worldwide coverage tracks, before diverging widely across the major economies.

US highest, China flattest: the US producer price index has risen to the highest level of the major economies, the euro area spiked and fell, and China stayed almost flat.

The swings were driven above all by energy, as our US energy prices and gas prices coverage shows, with the euro area hit hardest in 2022 and a fresh uptick across all the major economies in 2026 as oil prices climbed once more.

A note on the data. The figures show the Producer Price Index for all commodities in major economies from January 2020 to July 2026, as index levels or annual percent change. Base years differ by economy, so absolute levels are not directly comparable.

Producer price indices are compiled by national statistics offices and, for the euro area, by Eurostat, each using its own base year, which is why the levels shown cannot be compared directly in absolute terms.

The PPI measures prices at an earlier stage of production than the consumer price index, capturing the cost of goods as they leave the factory rather than as they reach the shopper.

PPI Index Level by Economy

The table sets out the PPI index level in the major economies at key points from 2020 to 2026. It shows the United States rising fastest, the euro area spiking and falling, and China staying almost flat.

Which Economy Had the Biggest Producer Price Shock?

The euro area saw by far the biggest producer price shock, with PPI rising about 43 percent over the year at its 2022 peak, driven by the energy crisis. The United States peaked near 16 percent and China and Japan far lower.

The scale of the euro area producer price spike in 2022, far larger than anything seen in the United States or Asia, made it the epicentre of the global producer price shock.

At its 2022 peak, euro area producer price inflation reached about 43 percent over the year, against roughly 16 percent in the United States, 10 percent in Japan and about 4 percent in China.

The euro area producer price spike of 2022 was among the largest ever recorded in a major advanced economy, a direct result of the energy crisis that followed the invasion of Ukraine. The euro area producer price spike of 2022 stands as the largest in any major advanced economy in decades, a direct consequence of its dependence on imported energy.

The gap between the euro area 43 percent peak and China 4 percent in the same year of 2022 shows how differently the same global commodity shock struck economies with different energy needs.

The scale of the euro area spike reflected its heavy dependence on imported energy, as our EU energy prices and inflation in Europe coverage details, after the invasion of Ukraine sent gas and power prices soaring.

The euro area was hit hardest: euro area producer price inflation peaked near 43 percent in 2022, against about 16 percent in the US, 10 percent in Japan and 4 percent in China.

Producer price inflation runs ahead of consumer inflation, so the 2022 producer price spike was an early warning of the consumer inflation that followed, as costs worked their way from the factory gate to the shop shelf over the following months and quarters.

The lead that producer prices have over consumer prices makes the PPI a closely watched indicator, since a spike at the factory gate often signals higher shop prices to come within months.

How Did Producer Prices Surge and Fall?

After the 2022 peak, producer prices collapsed. Euro area PPI swung from about plus 43 percent to minus 8 percent by 2023, one of the sharpest reversals on record, as energy prices fell back sharply from their highs.

The collapse in producer prices after 2022, from double-digit inflation to outright deflation in Europe, was as dramatic as the surge that preceded it. Euro area producer prices swung from about plus 43 percent over the year in 2022 to minus 8 percent in 2023, before settling near zero in 2024 and 2025 and turning modestly positive in 2026.

The collapse in producer prices after 2022, sharpest in the euro area, was a mirror image of the surge, and helped bring consumer inflation down across the advanced world.

The reversal from double-digit producer price inflation to outright deflation in barely a year, seen most starkly in the euro area, was one of the fastest price swings in modern economic history.

The collapse in producer prices in 2023 and 2024 helped bring consumer inflation down, feeding through with a lag, a process our central banks and interest rates coverage tracks as policy responded.

Surge then collapse: producer price inflation surged in 2021 and 2022 then fell sharply, with the euro area swinging from plus 43 percent to minus 8 percent within a year.

The swing from surging to falling producer prices within about a year shows how volatile the factory gate can be, driven by commodities and energy far more than the steadier prices consumers face day to day.

The speed of the swing, from surging to falling producer prices within about a year, underlines how much more volatile the factory gate is than the steadier prices households face.

Why Did Euro Area Producer Prices Swing So Much?

The euro area had the most dramatic producer price story of any major economy, with PPI swinging from about plus 43 percent in 2022 to minus 8 percent in 2023, before settling near zero and turning modestly positive again in 2026.

The euro area producer price story, a huge spike followed by a deep fall, is the clearest example of how exposed energy-importing economies were to the shocks of the 2020s.

Euro area producer price inflation swung from about plus 43 percent in 2022 to minus 8 percent in 2023, the sharpest reversal of any major economy, before stabilising near zero and rising modestly in 2026.

The euro area producer price swing, from a 43 percent spike to an 8 percent fall in barely a year, is the single most dramatic episode in the recent history of producer prices anywhere.

The euro area producer price swing is the clearest single illustration of how the energy crisis reshaped the economics of the 2020s, hitting Europe far harder than its peers. Even after stabilising, euro area producer prices remained sensitive to energy, rising again in 2026 when a fresh oil shock linked to conflict in the Middle East pushed costs up.

The wild swing reflected Europe heavy reliance on imported gas, leaving its factories, and Germany above all whose economy our German economy coverage tracks, far more exposed to the energy shock than those in the United States or Asia.

From +43% to -8%: euro area producer prices swung from about plus 43 percent in 2022 to minus 8 percent in 2023, the sharpest reversal of any major economy.

By 2026, euro area producer prices had stabilised and were rising modestly again, as a fresh energy shock linked to conflict in the Middle East pushed costs up once more, though on a far smaller scale than in 2022.

The renewed rise in euro area producer prices in 2026, though far smaller than the 2022 shock, showed that Europe remained exposed to swings in global energy prices.

What Drove the 2022 Spike?

Energy was overwhelmingly the biggest driver of the 2022 euro area producer price spike, accounting for the bulk of the roughly 43 percent rise, as gas and power prices soared right across the continent after the invasion of Ukraine.

Beyond energy, the prices of intermediate goods, the inputs factories buy from one another, also rose sharply, adding to the spike, while consumer and capital goods prices contributed a smaller share of the overall increase in producer prices that year.

Energy above all: energy accounted for most of the 43 percent euro area producer price spike in 2022, with intermediate and other goods adding the rest.

The dominance of energy in the 2022 spike explains why euro area producer prices fell so fast in 2023, since once energy prices dropped back, the single biggest driver of the surge went sharply into reverse.

Why Is China in Producer Price Deflation?

China stands apart, having spent years in producer price deflation. Chinese PPI was negative for much of the period from 2022 to 2025, weighed down by weak demand and industrial overcapacity, before turning positive in 2026.

China long stretch of producer price deflation set it apart from every other major economy, a sign of weak demand and overcapacity even as the rest of the world battled inflation.

Chinese producer prices were negative for much of 2022 to 2025, falling about 3 percent at the worst, before turning positive and rising about 3.5 percent over the year by July 2026.

The contrast between China producer price deflation and the double-digit inflation seen in Europe in 2022 was one of the starkest divides in the global economy of the decade. China producer price deflation, running against the global tide of inflation, reflected an economy wrestling with weak demand and industrial overcapacity rather than overheating prices.

While Europe fought a 43 percent producer price spike, China faced the opposite problem, with factory prices falling for years, a divide that shaped very different policy responses. The return of Chinese producer prices to positive territory in 2026, after so long in deflation, was a notable turning point, driven by higher commodity prices and steps to curb overcapacity.

The long stretch of falling factory prices reflected China struggle with weak domestic demand and excess capacity, a picture our China economy coverage frames, even as the rest of the world battled high inflation.

Years of deflation: Chinese producer prices were negative for much of 2022 to 2025, weighed down by weak demand and overcapacity, before turning positive in 2026.

In 2026, Chinese producer prices turned positive, rising about 3.5 percent over the year by July, driven by higher global commodity and energy prices and government efforts to curb excess industrial capacity. The turn to positive producer price inflation in China in 2026, after years of deflation, was driven by higher commodity prices and government efforts to curb excess capacity.

Why Are US Producer Prices Rising Fastest?

The United States has seen the steadiest rise in producer prices, with its PPI climbing to the highest level of the major economies and producer price inflation reaching about 4.7 percent over the year to July 2026.

The steady rise in United States producer prices, never falling into deflation, helps explain why US inflation has been slower to fade than in some other major economies.

US producer prices rose from an index around 117 in early 2020 to above 155 by mid-2026, the highest level of the major economies, with producer price inflation of about 4.7 percent in the year to July 2026.

The United States has ridden out the producer price swings of the 2020s better than the euro area, avoiding both the huge 2022 spike and the deflation that hit China. The steady climb in US producer prices to the highest level of any major economy reflects an economy that avoided both deflation and the worst of the energy shock.

The resilience of United States producer prices, rising steadily without the extremes seen elsewhere, reflects an economy less exposed to imported energy and more insulated from global shocks.

US producer prices rose from an index of about 117 in early 2020 to above 155 by mid-2026, never dipping into the deflation that gripped China nor spiking as violently as the euro area.

The renewed rise in US producer prices in 2026 was driven partly by higher energy costs and partly by tariffs, as our US tariffs coverage tracks, which raised the cost of imported goods and inputs for factories across a wide range of industries.

America leads: US producer prices rose about 4.7 percent over the year to July 2026, ahead of China at 3.5 percent, Japan at 2.5 percent and the euro area at about 2 percent.

US producer prices have proved stickier than in the euro area, never falling into deflation, which helps explain why US consumer inflation has also been slower to return fully to target than in some other economies.

The stickiness of US producer prices, held up by energy and tariffs, has been one of the reasons US consumer inflation has proved harder to bring fully back to target.

What Pushed Producer Prices Up in 2026?

Producer prices across the major economies rose again in 2026, driven by a fresh energy shock. Higher oil and gas prices, linked to conflict in the Middle East, pushed factory costs up across the United States, Europe and Asia.

The fresh producer price uptick of 2026, driven once again by energy, showed how quickly factory costs can rise when oil and gas prices climb. The 2026 producer price uptick tracked the rise in crude oil prices almost exactly, climbing through the spring as oil rose and beginning to ease by mid-year as prices stabilised.

The fresh producer price uptick of 2026 was a reminder that, even years after the 2022 shock, energy remains the single most powerful force acting on factory prices worldwide.

The 2026 uptick lifted producer prices across the United States, Europe and Asia at once, but it was far milder than 2022 and began to fade as oil prices stabilised by the middle of the year.

The 2026 uptick tracked the rise in crude oil prices closely, as our crude oil prices and global oil industry coverage shows, a reminder of how central energy remains to producer price inflation worldwide.

Bars PPI, line oil: producer prices rose again in 2026 as crude oil prices climbed after conflict in the Middle East, before easing by mid-year as oil stabilised.

The uptick was smaller and more contained than the 2022 shock, and began to ease by mid-2026 as oil prices stabilised, though it was enough to lift producer price inflation across most major economies.

The 2026 uptick, smaller and more contained than the 2022 shock, began to ease by mid-year as oil prices stabilised, though it lifted producer prices across most major economies.

How Do the Major Economies Compare?

The major economies compare very differently on producer prices. The United States has the highest index level and steadiest rise, the euro area the most volatile, Japan a steady climb, and China the flattest after years of deflation.

The sharp differences between the major economies on producer prices reflect how differently the same global shocks played out depending on energy dependence and demand. The United States, euro area, Japan and China have followed strikingly different producer price paths since 2020, from steady rises to huge spikes and long stretches of deflation.

No single figure captures producer prices across the major economies, which have ranged from deflation in China to a 43 percent spike in the euro area within the same few years. The four major economies offer four very different producer price stories, shaped by how exposed each is to energy, how strong its demand, and how its industry is structured.

These contrasting paths, a steady US, a volatile euro area, a rising Japan and a recovering China, leave the major economies at very different stages of the producer price cycle in 2026.

These differences reflect energy dependence, demand strength and industrial structure, a picture our largest economies coverage frames, with energy-importing Europe far more exposed than the United States or China.

Four very different paths: the US leads on price level, the euro area on volatility, Japan on steady growth and China on recovery from deflation, on an indexed scale.

The divergence in producer prices feeds into differences in consumer inflation and monetary policy, leaving the major economies at different points in the price cycle even as they face the same global commodity and energy markets that ultimately drive them all.

The divergence in producer prices across the major economies leaves them at different points in the price cycle, even as they all face the same global commodity and energy markets.

Producer Prices in Numbers

A few figures capture the picture. US producer prices rose about 4.7 percent over the year to July 2026, Chinese prices about 3.5 percent after years of deflation, and the euro area, once up 43 percent in 2022, rose only modestly.

These figures together capture one of the most volatile periods for producer prices on record, with energy the common thread running through every major swing. These figures matter because producer prices are a leading indicator, so the divergence between the major economies signals different inflation paths in the months ahead.

Producer prices lead consumer prices, so the sharp divergence between the major economies in 2026 points to different consumer inflation paths in the months and years ahead. Taken together, these figures show an unusually turbulent stretch for producer prices, with the major economies swinging between spikes, deflation and recovery in the space of a few years.

These figures matter because producer prices lead consumer inflation, shaping the outlook for prices and interest rates, a picture our global inflation coverage sets alongside the consumer price story.

Where prices stand: US producer prices are rising fastest among the major economies in 2026, with China out of deflation and the euro area rising only modestly.

Together they describe a world where producer prices have diverged sharply since 2020, from the US steady rise to China long deflation, with energy the common thread running through every swing. For now, producer prices in the major economies have diverged more than at almost any time in recent decades, with energy the single most important driver of every swing.

Producer Prices 2020-2026: The Big Picture

Taken together, producer prices in the major economies from 2020 to 2026 show one of the most volatile periods on record, from the huge euro area spike of 2022 to China years of deflation and the fresh energy-driven uptick of 2026.

The period from 2020 to 2026 packed a full producer price cycle, boom, bust and recovery, into just six years, an unusually compressed and volatile stretch by any historical standard.

Bubble size shows GDP: the US combines a high price level with fast inflation, while China sits low on both after years of deflation. Position shows inflation against price level.

Whether producer prices stay contained will depend above all on energy, as our global economy coverage tracks, but the experience since 2020 shows how quickly the factory gate can swing from deflation to double-digit inflation and back.

Frequently Asked Questions: Producer Prices