Electric heating: Correlation
Prices it moves with, and why
Covers resistance heaters, induction, electric arc furnaces and microwaves. The proxy is a US index of industrial furnaces and electric heating equipment, which follows steel, nickel alloys, controls and labour, while use depends on electricity prices.
Proxy US PPI: industrial furnaces, ovens and electrical heating equipment index · monthly, Jan 2006 to Sep 2026There is no free public price for electric heating itself, so this tab uses the closest public series as a stand-in. Read the numbers as an indication, not as the price of this exact item.
What its price moves with
Selected linkElectric heating and Energy in buildings
Monthly changes 0.14 little or none correlation 12-month changes 0.77 strong correlation Last 5 years 0.21 monthly changes Lead or lag −1 mo Electric heating tends to lead by 1 month (r 0.26) Price function, Jan 2006 to Sep 2026 Electric heating ≈ 1,564 × (Energy in buildings)1.25 R² 0.94 On this fit, a 10% higher energy in buildings price goes with a 12.6% higher electric heating price over the long run. Units: index and US$/kWh.Chart: Electric heating and Energy in buildings prices rebased to 100 at Jan 2006, log scale
Both prices rebased to 100 at Jan 2006, on a log scale so equal percentage moves look the same size.Chart: Electric heating price against Energy in buildings price, monthly, log scales, with fitted line
Each dot is one month; paler dots are older (2006), darker dots recent (2026); the ringed dot is the latest month. The dashed line is the fitted price function. Both axes are logarithmic.Electric heating turns every unit of power into heat, so electricity prices decide its running cost and whether it beats gas. Yearly moves correlate at 0.77 with the electricity proxy, mostly shared US inflation, while monthly moves barely correlate.
little or none co-movement month to month · 248 months Show chartsResistance elements are usually nickel-chromium alloy wire, and furnace parts use nickel-rich steels. Nickel swings are large but the link is weak, with monthly moves correlating at 0.09, because alloy is a small share of finished equipment.
little or none co-movement month to month · 249 months Show chartsElectric arc furnaces melt scrap into new steel, and furnace bodies are themselves steel. Monthly moves correlate at 0.24 with the steel index and at 0.33 over the last five years, a modest link from shared steel costs and steel industry investment.
weak co-movement month to month · 249 months Show chartsElectric arc furnaces consume large graphite electrodes made from needle coke, and electrode shortages have raised steelmaking costs. The proxy for carbon and graphite products shows no clear link with the equipment index, correlating at -0.04 monthly, as electrodes are a running cost.
little or none co-movement month to month · 249 months Show chartsHeat pumps deliver several units of heat per unit of electricity, so they compete with resistance heating wherever power is costly. Monthly moves correlate at 0.42 and yearly at 0.85, a common driver from US equipment manufacturing costs.
moderate co-movement month to month · 249 months Show chartsGas-fired furnaces and boilers are the main alternative for industrial and home heating, so the gas price relative to power decides which wins. Yearly moves correlate only weakly with European gas, as equipment prices adjust slowly to fuel markets.
little or none co-movement month to month · 249 months Show chartsHow to read these numbers
Correlation of monthly changes (the number in the coloured pill) compares how much each price moved, month by month, since 2006 or the first month both series exist. It runs from −1 to +1: near +1 the two usually rise and fall in the same months, near 0 there is no link, and a negative number means they tend to move in opposite directions. Above 0.7 is strong, 0.4 to 0.7 moderate, 0.2 to 0.4 weak.
12-month changes compare year-on-year moves, which shows whether two prices share the same cycles even when the month-to-month noise differs.
Price function is a straight-line fit of the two prices on logarithmic scales: price ≈ k × (partner price)β. β is how much this price moves, in per cent, for a 1% move in the partner over the whole period, and R² is the share of the variation the fit explains. Two prices that both drift up with inflation can fit well without any real link, so read it together with the monthly correlation.
Lead or lag checks whether the monthly correlation is clearly higher when one price is shifted by 1 to 6 months.
Correlation is not cause. The reasons on each card explain the economic link; the numbers show how strongly it has shown up in prices. Proxy series are US producer price indexes or related prices and can blur the real link.
Data: World Bank Commodity Price Data (Pink Sheet), October 2026; US Bureau of Labor Statistics producer price indexes, IMF primary commodity prices and US EIA prices via FRED, Federal Reserve Bank of St. Louis, retrieved November 2026. Calculations by this site.