Spain producer inflation slows in July

Producer prices in Spain rose 0.3% year-on-year in July 2025, marking a slowdown from the 0.8% gain recorded in June and underscoring easing cost pressures in the industrial sector. The moderation was primarily driven by slower energy price growth, which increased 1.5% compared with 4% in the previous month, reflecting both softer global oil and gas benchmarks and more stable electricity generation costs.

Additional downward pressures came from the continued deflation in consumer-related categories. Prices for consumer goods fell 1.3% year-on-year (after a 1.7% drop in June), led by further weakness in non-durable goods such as food and household products (-1.5% vs -1.9%). Intermediate goods also slipped deeper into negative territory (-0.8% vs -0.7%), highlighting ongoing slack in demand and subdued pricing power across supply chains.

By contrast, producer inflation strengthened for durable consumer goods and capital goods, which often signal longer-term investment trends. Prices for durable goods rose 1.7% (up from 1.5%), supported by resilience in furniture, appliances, and automotive equipment. Meanwhile, capital goods climbed 1.8% (vs 1.7%), reflecting firmer pricing in machinery and industrial equipment, sectors that remain more shielded from consumer demand fluctuations.

Excluding the volatile energy component, producer prices fell 0.5%, following a 0.7% decline in June, indicating that core pricing pressures remain subdued. On a monthly basis, however, producer prices rose 0.8%, easing significantly from the 3.3% surge seen in June, which had been boosted by energy-related volatility.

Overall, the July figures suggest that Spanish industry continues to face muted cost pressures, with falling prices in most consumer-oriented categories offsetting modest gains in capital goods. The softer trajectory in producer inflation aligns with broader euro area trends and may reinforce expectations that headline inflation will remain contained in the near term. However, the uptick in capital and durable goods points to pockets of resilience tied to investment and manufacturing demand, which could provide some support to industrial activity going forward.