© Reuters. FILE PHOTO: Office lights are illuminated at dusk in high rise buildings at La Defense business and financial district near Paris, France, December 5, 2022. REUTERS/Pascal Rossignol
FRANKFURT (Reuters) – Euro zone companies are raising prices at a more moderate pace as their costs stabilise, demand cools and competition mounts, although growing wages remain a concern, according to a European Central Bank survey published on Friday.
The ECB slowed the pace of its interest rate increases on Thursday but signalled more tightening to come in what markets expect to be the final stage of its fight against inflation.
The central bank’s latest poll of 61 large euro zone companies from outside the financial sector may give it some comfort, with companies reporting slower price growth, albeit with differences among sectors.
“The rate of increase in selling prices was said to be moderating overall, broadly as anticipated at the beginning of the year,” the ECB said.
“To a large extent, this moderation reflected stabilising non-labour input costs and the rebalancing of supply and demand for many goods since last summer.”
Labour costs were rising, with wages expected to rise by 5% this year — unchanged from the previous survey round in February.
This meant that service providers, which are particularly sensitive to labour costs, continued to anticipate strong price hikes.
By contrast, companies that sell consumer goods, particularly non-essential ones, saw price hikes “becoming more difficult”.