Producer Price Indexes, Australia methodology

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Reference period
December 2023
Released
2/02/2024

Explanatory notes

Introduction

This publication and associated time series spreadsheets and data cubes contain a range of Producer Price Indexes. Economy-wide indexes are presented within a Final demand index framework in this publication. Additionally, indexes relating to all products (goods or services) that are used or produced by establishments classified to specific industries (selected Mining, Manufacturing, Construction and Services industries).

The suite of Producer Price Indexes are calculated on an index reference period of 2011-12 = 100.0, with some exceptions. Selected series in Table 35 - Output of the Health care and social assistance industries, group and class index numbers are calculated on an index reference period of 2012-13 = 100.0. Selected series in Table 27 - Output of the Other services industries, group and class index numbers and series in Table 36 - Output of the Mining industries are calculated on an index reference period of 2015-16 = 100.0.

In December quarter 2019, the ABS made the decision to discontinue the Stage of Production (SOP) series, and instead produce only the Final Demand (excluding exports) series. Final products are those that are ready to be sold for immediate consumption, capital formation or export. Tables and Data Cubes published in this series are:

  • Table 1 Final demand, Index Numbers and Percentage Changes and,
  • Table 5 Final demand: Contribution to Final demand index by industry - index points.

Developments

From March quarter 2022, the weights of the Final demand, Input to the Manufacturing, Output of the Manufacturing, Output of the Services, and Output of the mining indexes, were updated in line with the 2018/19 Australian National Accounts: Input-Output (I-O) tables. Additionally, index structures have been updated in accordance with changes in I-O. As a consequence of the re-weight, the points contributions for March quarter 2022 will not be comparable with the points contributions from earlier periods.

In the September quarter 2012, recommendations arising from the 2011 Review of the Producer and International Trade Price Indexes were implemented. The outcomes of this review are recorded in the Information Paper: Outcome of the Review of the Producer and International Trade Price Indexes (cat.no.6427.0.55.004). Major changes are summarised below:

  • The index structures have been updated to represent industries rather than products primary to industries. This aligns with the principal purpose of the Producer Price Indexes, which is to measure inflation by industry to support the compilation of the Australian National Accounts and Balance of Payments.
  • The Final demand indexes are presented using the Australian and New Zealand Standard Industrial Classification, 2006 edition (ANZSIC 2006). This brings them in line with the industry specific indexes.
  • All index numbers are calculated on the index reference period 2011-12 = 100.0, except where otherwise stated (e.g. introduction of new indexes).

General

Final demand index

Mining industry producer price indexes

Manufacturing industries producer price indexes

Construction industries producer price indexes

Retail trade industry producer price indexes

Services industries producer price indexes

Index numbers

Index numbers for financial years are simple averages of the relevant quarterly index numbers.

Indexes for the Input to the House construction industry are presented separately for each of the six state capital cities and indexes for the Output of Construction industry are presented separately for each of the states and territories (i.e. capital city or state/territory). These indexes measure price change over time; they do not measure differences in price levels between capital cities or states/territories.

Rounding

Published index numbers are rounded to one decimal place. Percentage change movements are calculated from the index numbers and then rounded to one decimal place. Rounding errors can occur, causing discrepancies (e.g. when calculating percentage changes of aggregates and their components).

Analysis of index numbers

Care should be exercised when interpreting quarter-to-quarter movements in the indexes as short-term movements do not necessarily indicate changes in trend.

Movements in indexes from one period to another can be expressed either as changes in index points or as percentage changes. The following example illustrates the method of calculating index points changes and percentage changes between any two periods:

Final demand index numbers
September quarter 2023 127.0 (see Table 1)
less September quarter 2022 122.3 (see Table 1)
Change in index points 4.7
Percentage change 4.7/122.3 X 100 = 3.8% (see Table 1)

The data cube for Final demand (see Table 5) provides analyses of the index points contribution of select ANZSIC groups towards the Final demand index. For example, Petroleum refining and petroleum fuel manufacturing contributed 1.18 index points to the Final demand index number of 127.0 for the September quarter 2023 and 0.12 index points to the net change of 2.2 index points between the June 2023 and September 2023 quarters.

Further information on price index developments in the ABS is presented in the following publications:

Information Paper: Producer and International Trade Price Indexes; Concepts, Sources and Methods, 2022 (cat. no. 6429.0)

Information Paper: Changes to Time Series Spreadsheets for Producer Price Indexes, Australia, Feb 2006 (cat. no. 6427.0.55.001)

Information Paper: Update on ANZSIC 2006 Implementation for Producer and International Trade Price Indexes, Australia, 2009 (cat. no. 6427.0.55.002)

Information Paper: Review of the Producer and International Trade Price Indexes, 2011 (cat. no. 6427.0.55.003)

Information Paper: Outcome of the Review of the Producer and International Trade Price Indexes (cat. no. 6427.0.55.004)

Information Paper: Implementation of the Review of the Producer and International Trade Price Indexes (cat. no. 6427.0.55.005)

Information Paper: Producer Price Indexes Weighting Patterns (cat. no. 6427.0.55.006)

Information Paper: An Analytical Framework for Price Indexes in Australia (cat. no. 6421.0)

Information Paper: Producer Price Index Developments (cat. no. 6422.0)

Information Paper: Review of the Import Price Index and Export Price Index, Australia (cat. no. 6424.0)

Information Paper: Price Indexes and The New Tax System (cat. no. 6425.0)

Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006, (Revision 2.0) (cat. no. 1292.0)

Information Paper: Update on ANZSIC 2006 Implementation (cat. no. 1295.0.55.001)

Users may also wish to refer to the following related publications and other data products that are available free of charge from the ABS website.

International Trade Price Indexes, Australia (cat. no. 6457.0)

Consumer Price Index, Australia (cat. no. 6401.0)

Wage Price Index, Australia (cat. no. 6345.0)

Residential Property Price Indexes: Eight Capital Cities (cat.no. 6416.0)

Australian National Accounts: Input-Output Tables (cat. no. 5209.0.55.001)

Balance of Payments and International Investment Position, Australia (cat. no. 5302.0)

Current publications and other products released by the ABS are listed on the ABS website. The ABS also issues a daily Release Advice on the website which details products to be released in the week ahead.

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