Insee Analyses · May 2023 · n° 84

The direct pass-through of imported input and energy cost shocks to producer prices: a highly heterogeneous impact across firms

The surge in energy and import prices weighted on the production costs of firms, which in turn raised their prices and fueled inflation. In the manufacturing industry, over the period from early 2021 to mid-2022, an increase in the price of imported inputs (excluding energy products) that raises production costs by 10% led to an average 5% increase in output prices through direct transmission effects. An increase in energy prices was completely passed through on output prices. Between the first quarter of 2021 and the second quarter of 2022, this direct transmission alone accounted for an increase in the producer price index of nearly 14 points and nearly 10 points respectively for the chemical and metallurgical industries, which were particularly affected sectors. This contribution was limited to a little over 2 points for the least affected half of the companies but exceeded 20 points for the 1% most affected.