PREFACE
Part A of this paper introduces experimental producer and international trade price index series within a Stage of Production (SOP) framework. The SOP framework represents an important element of the strategy for the systematic analysis of inflation as outlined in the Australian Bureau of Statistics (ABS) Information Paper: An Analytical Framework for Price Indexes in Australia (Cat. no. 6421.0) released on 24 February 1997.
The experimental SOP indexes are intended to increase the analytical value of the established producer and international trade price indexes by presenting the information within an economy-wide framework. They are designed to supplement, rather than replace, the existing range of measures.
Part B of the paper presents experimental producer price indexes for the output of a selection of transport and storage, and property and business services industries. These series represent the first release of indexes compiled under a long-term development program which will progressively expand coverage of the services sector of the economy.
The indexes will be useful in their own right. They will also play an important role in improving the quality of the national accounts as well as contributing to inflation measurement through their incorporation within the SOP framework.
The ABS is keen to obtain user reactions to the developments described in this paper, particularly in respect of the issues raised in sections 6 and 11.
Comments can be directed to, and further information may obtained from:
David Collins
Director
Producer Price Indexes Section
Australian Bureau of Statistics
PO Box 10
BELCONNEN ACT 2616
Telephone: Canberra 02 6252 6248
Facsimile: Canberra 02 6252 7060
Email david.collins@abs.gov.au
SUMMARY
For many years, the Australian Bureau of Statistics (ABS) has been compiling and publishing a range of separate producer price indexes and international trade price indexes, each relating to a particular sector of the economy.
An economy-wide Stage of Production (SOP) index model has been developed to provide a framework for bringing together the range of detailed price data contained in the separate indexes to enhance the analytical value of the data. The SOP framework is based on an economic categorisation of transactions according to their sequencing in the production chain.
SOP index series have been constructed as experimental measures, with the index structures and weighting patterns initially based on 1989-90 Input-Output tables. Once established, the SOP indexes will be based on more recent Input-Output tables and incorporate frequent reweighting and chaining.
The experimental indexes have been compiled on a quarterly and annual basis commencing with 1991-92 and are presented in part A of this paper, along with index structures and weighting patterns.
Conceptually the scope of the new framework relates to the output of all the goods and services industries in the economy. In practice the coverage of the initial experimental indexes is limited to goods producing industries, excluding construction. Further, a fully articulated data model would embrace other key aggregates from the Input-Output framework, in particular compensation of employees. A brief description of such a data model is provided in section 5 of part A.
Experimental producer price index series relating to the output of a selection of service industries are presented in part B. After reasonable coverage of the services sector of the economy is achieved, it will be possible to incorporate the new data within the price indexes compiled under the SOP model.
