6422.0 - Information Paper: Producer Price Indexes Developments, 1999  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 25/03/1999   
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4.6 Table 3 below contains experimental quarterly and annual index series for each of the major categories of the SOP index model. The index numbers have been calculated on a reference base of 1989–90 = 100.0 and are presented for each quarter and financial year from 1991–92. Table 4 presents the corresponding annual and quarterly percentage changes.


3: EXPERIMENTAL INDEX NUMBERS, BY STAGE AND SOURCE - Base of each index: 1989--90 =100.0
Preliminary (Stage 1) goods
Intermediate (Stage 2) goods
Final (Stage 3) goods
Period
Domestic
Imports
Total
Domestic
Imports
Total
Domestic
Imports
Total
YEAR
1991-92
104.4
100.2
103.6
105.2
102.7
104.7
100.5
105.3
101.4
1992-93
106.4
106.5
106.4
107.4
111.5
108.2
103.8
117.4
106.4
1993-94
105.7
107.4
106.0
108.1
115.9
109.6
104.6
122.0
108.0
1994-95
109.3
108.9
109.3
110.1
116.1
111.2
106.9
120.4
109.5
1995-96
112.5
113.2
112.6
112.4
116.4
113.2
109.1
119.1
111.0
1996-97
110.3
106.3
109.5
112.3
110.1
111.9
108.3
113.0
109.2
1997-98
111.0
107.7
110.4
113.3
114.9
113.6
110.7
120.3
112.6
QUARTER
1991
Sep
104.1
99.9
103.3
104.7
101.6
104.1
99.7
102.6
100.3
Dec
104.4
99.9
103.5
105.1
102.0
104.5
99.8
104.1
100.6
1992
Mar
104.4
101.1
103.7
105.2
103.7
104.9
101.1
107.2
102.3
Jun
104.8
100.1
103.8
105.7
103.6
105.3
101.2
107.2
102.4
Sep
106.2
104.5
105.9
107.2
108.4
107.4
102.8
113.4
104.9
Dec
106.9
106.7
106.9
107.7
111.2
108.3
103.9
117.4
106.5
1993
Mar
106.4
107.1
106.6
107.4
112.4
108.4
104.6
118.6
107.4
Jun
105.9
107.8
106.3
107.4
114.0
108.7
103.7
120.3
107.0
Sep
106.7
109.7
107.3
108.5
117.6
110.2
105.0
124.4
108.8
Dec
105.9
109.9
106.7
108.4
118.3
110.3
105.2
124.6
109.0
1994
Mar
104.8
105.8
105.0
107.4
114.4
108.7
104.0
119.6
107.0
Jun
105.3
104.4
105.2
108.1
113.5
109.1
104.2
119.5
107.2
Sep
106.6
105.4
106.4
108.6
113.9
109.6
104.7
119.6
107.6
Dec
108.3
106.4
107.9
109.1
114.1
110.1
105.6
117.9
108.0
1995
Mar
110.3
108.7
110.0
110.6
115.5
111.5
107.5
119.1
109.8
Jun
112.2
115.2
112.8
112.1
120.8
113.7
109.8
125.0
112.8
Sep
113.4
115.7
113.9
112.7
119.2
114.0
109.9
122.7
112.4
Dec
112.9
114.0
113.1
112.5
116.6
113.3
109.3
120.4
111.5
1996
Mar
112.4
113.3
112.6
112.4
116.4
113.2
109.2
118.8
111.1
Jun
111.2
109.7
110.9
112.0
113.2
112.2
107.9
114.3
109.2
Sep
110.0
107.3
109.5
111.9
110.8
111.7
107.8
113.9
109.0
Dec
110.0
106.3
109.3
112.2
110.2
111.8
107.6
113.0
108.7
1997
Mar
110.8
106.3
109.9
112.7
110.1
112.2
108.5
112.7
109.3
Jun
110.5
105.1
109.5
112.5
109.3
111.9
109.1
112.6
109.8
Sep
110.7
106.8
110.0
113.2
111.2
112.8
109.5
115.8
110.7
Dec
111.8
107.5
111.0
113.9
115.0
114.1
110.9
120.2
112.7
1998
Mar
110.8
107.8
110.2
113.0
115.9
113.5
110.6
121.5
112.8
Jun
110.6
108.6
110.2
113.0
117.4
113.8
111.8
123.5
114.1

4: EXPERIMENTAL INDEX NUMBERS, BY STAGE AND SOURCE - Percentage change (from previous period)
Preliminary (Stage 1) goods
Intermediate (Stage 2) goods
Final (Stage 3) goods
Period
Domestic
Imports
Total
Domestic
Imports
Total
Domestic
Imports
Total
YEAR
1992-93
1.9
6.3
2.7
2.1
8.6
3.3
3.3
11.5
4.9
1993-94
-0.7
0.8
-0.4
0.7
3.9
1.3
0.8
3.9
1.5
1994-95
3.4
1.4
3.1
1.9
0.2
1.5
2.2
-1.3
1.4
1995-96
2.9
3.9
3.0
2.1
0.3
1.8
2.1
-1.1
1.4
1996-97
-2.0
-6.1
-2.8
-0.1
-5.4
-1.1
-0.7
-5.1
-1.6
1997-98
0.6
1.3
0.8
0.9
4.3
1.5
2.2
6.4
3.1
QUARTER
1991
Dec
0.3
0.0
0.2
0.4
0.4
0.4
0.1
1.5
0.3
1992
Mar
0.0
1.2
0.2
0.1
1.7
0.4
1.3
3.0
1.7
Jun
0.4
-1.0
0.1
0.5
-0.1
0.4
0.1
0.0
0.1
Sep
1.3
4.4
2.0
1.4
4.6
2.0
1.6
5.8
2.4
Dec
0.7
2.1
0.9
0.5
2.6
0.8
1.1
3.5
1.5
1993
Mar
-0.5
0.4
-0.3
-0.3
1.1
0.1
0.7
1.0
0.8
Jun
-0.5
0.7
-0.3
0.0
1.4
0.3
-0.9
1.4
-0.4
Sep
0.8
1.8
0.9
1.0
3.2
1.4
1.3
3.4
1.7
Dec
-0.7
0.2
-0.6
-0.1
0.6
0.1
0.2
0.2
0.2
1994
Mar
-1.0
-3.7
-1.6
-0.9
-3.3
-1.5
-1.1
-4.0
-1.8
Jun
0.5
-1.3
0.2
0.7
-0.8
0.4
0.2
-0.1
0.2
Sep
1.2
1.0
1.1
0.5
0.4
0.5
0.5
0.1
0.4
Dec
1.6
0.9
1.4
0.5
0.2
0.5
0.9
-1.4
0.4
1995
Mar
1.8
2.2
1.9
1.4
1.2
1.3
1.8
1.0
1.7
Jun
1.7
6.0
2.5
1.4
4.6
2.0
2.1
5.0
2.7
Sep
1.1
0.4
1.0
0.5
-1.3
0.3
0.1
-1.8
-0.4
Dec
-0.4
-1.5
-0.7
-0.2
-2.2
-0.6
-0.5
-1.9
-0.8
1996
Mar
-0.4
-0.6
-0.4
-0.1
-0.2
-0.1
-0.1
-1.3
-0.4
Jun
-1.1
-3.2
-1.5
-0.4
-2.7
-0.9
-1.2
-3.8
-1.7
Sep
-1.1
-2.2
-1.3
-0.1
-2.1
-0.4
-0.1
-0.3
-0.2
Dec
0.0
-0.9
-0.2
0.3
-0.5
0.1
-0.2
-0.8
-0.3
1997
Mar
0.7
0.0
0.5
0.4
-0.1
0.4
0.8
-0.3
0.6
Jun
-0.3
-1.1
-0.4
-0.2
-0.7
-0.3
0.6
-0.1
0.5
Sep
0.2
1.6
0.5
0.6
1.7
0.8
0.4
2.8
0.8
Dec
1.0
0.7
0.9
0.6
3.4
1.2
1.3
3.8
1.8
1998
Mar
-0.9
0.3
-0.7
-0.8
0.8
-0.5
-0.3
1.1
0.1
Jun
-0.2
0.7
0.0
0.0
1.3
0.3
1.1
1.6
1.2

4.7 The following table provides a summary of some key data from table 3.

EXPERIMENTAL INDEX NUMBERS FOR JUNE QUARTER 1998 - Base: 1989-90 = 100.0
Preliminary
(Stage 1) goods
Intermediate
(Stage 2) goods
Final
(Stage 3) goods
Domestically produced
110.6
113.0
111.8
Imports
108.6
117.4
123.5
Total
110.2
113.8
114.1

4.8 It can be seen that, over the eight-year period between 1989–90 and June quarter 1998, the price index for domestically produced Final (Stage 3) goods increased by a relatively modest 11.8% while prices for imported Final goods increased by a more substantial 23.5%. The resulting index for total Final goods increased by 14.1% (reflecting the impact of an approximately 80:20 weighting applied in combining the domestic and import series.

4.9 Table 5 shows a decomposition of the Final goods index series into consumption, capital and export goods. Table 6 presents the corresponding annual and quarterly percentage changes.

5: EXPERIMENTAL INDEX NUMBERS FOR FINAL (STAGE 3) GOODS, BY DESTINATION
Base of each index: 1989--90 = 100.0
Domestic
Imports
Total
Consum-
Sub-
Consum-
Consum-
Sub-
Period
ption
Capital
total
Exports
Total
ption
Capital
Total
ption
Capital
total
Exports
Total
(1) 
(2) 
(1)+(2)
(3) 
(4) 
(3)+(4)
YEAR
1991-92
106.8
105.3
106.4
91.2
100.5
106.8
103.9
105.3
106.8
104.7
106.1
91.2
101.4
1992-93
109.3
108.8
109.1
95.4
103.8
117.2
117.6
117.4
110.8
112.9
111.5
95.4
106.4
1993-94
111.0
112.4
111.4
94.0
104.6
120.9
122.9
122.0
113.0
117.3
114.4
94.0
108.0
1994-95
113.7
113.7
113.7
96.3
106.9
119.1
121.5
120.4
114.8
117.3
115.6
96.3
109.5
1995-96
116.8
115.5
116.5
97.5
109.1
118.9
119.2
119.1
117.2
117.2
117.2
97.5
111.0
1996-97
118.7
115.8
118.0
93.1
108.3
114.3
112.0
113.0
117.9
114.0
116.6
93.1
109.2
1997-98
118.2
117.1
118.0
99.4
110.7
122.4
118.5
120.3
119.1
117.7
118.6
99.4
112.6

QUARTER
1991
Sep
106.0
104.8
105.7
90.5
99.7
104.1
101.3
102.6
105.6
103.2
104.8
90.5
100.3
Dec
106.7
104.8
106.2
89.9
99.8
105.4
102.9
104.1
106.4
103.9
105.6
89.9
100.6
1992
Mar
107.0
105.4
106.6
92.6
101.1
108.9
105.8
107.2
107.4
105.6
106.8
92.6
102.3
Jun
107.4
106.3
107.2
92.0
101.2
108.9
105.8
107.2
107.7
106.1
107.2
92.0
102.4
Sep
108.2
107.2
108.0
94.8
102.8
114.1
112.8
113.4
109.4
109.9
109.5
94.8
104.9
Dec
108.9
108.2
108.7
96.3
103.9
117.1
117.7
117.4
110.5
112.6
111.2
96.3
106.5
1993
Mar
109.9
109.5
109.8
96.6
104.6
118.1
118.9
118.6
111.5
113.9
112.3
96.6
107.4
Jun
110.1
110.3
110.1
93.7
103.7
119.5
121.0
120.3
111.9
115.3
113.0
93.7
107.0
Sep
110.5
111.3
110.7
96.1
105.0
123.0
125.5
124.4
112.9
117.9
114.6
96.1
108.8
Dec
111.0
112.2
111.3
95.8
105.2
123.5
125.5
124.6
113.4
118.4
115.1
95.8
109.0
1994
Mar
110.7
112.8
111.2
92.7
104.0
118.8
120.4
119.6
112.3
116.4
113.6
92.7
107.0
Jun
112.0
113.3
112.3
91.6
104.2
118.4
120.4
119.5
113.2
116.6
114.4
91.6
107.2
Sep
112.4
113.2
112.6
92.3
104.7
118.6
120.4
119.6
113.7
116.6
114.6
92.3
107.6
Dec
112.9
113.2
112.9
94.1
105.6
116.9
118.7
117.9
113.7
115.8
114.4
94.1
108.0
1995
Mar
114.3
113.8
114.2
97.2
107.5
118.0
120.0
119.1
115.1
116.7
115.6
97.2
109.8
Jun
115.3
114.7
115.1
101.6
109.8
122.8
126.8
125.0
116.8
120.3
117.9
101.6
112.8
Sep
116.5
115.2
116.2
100.1
109.9
121.9
123.4
122.7
117.6
119.0
118.1
100.1
112.4
Dec
117.0
115.4
116.6
97.9
109.3
119.9
120.9
120.4
117.6
118.0
117.7
97.9
111.5
1996
Mar
116.8
115.6
116.5
97.9
109.2
118.7
118.9
118.8
117.2
117.1
117.1
97.9
111.1
Jun
117.0
115.9
116.7
94.3
107.9
115.1
113.6
114.3
116.6
114.8
116.0
94.3
109.2
Sep
117.6
115.6
117.1
93.4
107.8
114.8
113.1
113.9
117.1
114.4
116.2
93.4
109.0
Dec
118.6
115.6
117.9
91.7
107.6
113.9
112.2
113.0
117.7
114.0
116.5
91.7
108.7
1997
Mar
119.4
116.0
118.5
92.9
108.5
114.1
111.5
112.7
118.3
113.9
116.9
92.9
109.3
Jun
119.4
116.0
118.6
94.4
109.1
114.3
111.1
112.6
118.4
113.7
116.8
94.4
109.8
Sep
118.0
116.3
117.6
96.9
109.5
117.4
114.4
115.8
117.9
115.4
117.1
96.9
110.7
Dec
118.4
116.7
118.0
99.8
110.9
122.0
118.7
120.2
119.1
117.6
118.6
99.8
112.7
1998
Mar
117.8
116.9
117.6
99.8
110.6
123.8
119.6
121.5
119.0
118.2
118.7
99.8
112.8
Jun
118.7
118.3
118.6
101.2
111.8
126.2
121.2
123.5
120.2
119.6
120.0
101.2
114.1


6: EXPERIMENTAL INDEX NUMBERS, FINAL (STAGE 3) GOODS, BY DESTINATION
Percentage change (from previous period)
Domestic
Imports
Total
Consum-
Sub-
Consum-
Consum-
Sub-
Period
ption
Capital
total
Exports
Total
ption
Capital
Total
ption
Capital
total
Exports
Total
(1) 
(2) 
(1)+(2)
(3) 
(4) 
(3)+(4)
YEAR
1992-93
2.3
3.3
2.5
4.6
3.3
9.7
13.2
11.5
3.7
7.8
5.1
4.6
4.9
1993-94
1.6
3.3
2.1
-1.5
0.8
3.2
4.5
3.9
2.0
3.9
2.6
-1.5
1.5
1994-95
2.4
1.2
2.1
2.4
2.2
-1.5
-1.1
-1.3
1.6
0.0
1.0
2.4
1.4
1995-96
2.7
1.6
2.5
1.2
2.1
-0.2
-1.9
-1.1
2.1
-0.1
1.4
1.2
1.4
1996-97
1.6
0.3
1.3
-4.5
-0.7
-3.9
-6.0
-5.1
0.6
-2.7
-0.5
-4.5
-1.6
1997-98
-0.4
-1.1
-0.5
-1.8
-1.0
-3.1
-2.2
-2.6
-1.0
-1.6
-1.2
-1.8
-1.3

QUARTER
1991
Dec
0.7
0.0
0.5
-0.7
0.1
1.2
1.6
1.5
0.8
0.7
0.8
-0.7
0.3
1992
Mar
0.3
0.6
0.4
3.0
1.3
3.3
2.8
3.0
0.9
1.6
1.1
3.0
1.7
Jun
0.4
0.9
0.6
-0.6
0.1
0.0
0.0
0.0
0.3
0.5
0.4
-0.6
0.1
Sep
0.7
0.8
0.7
3.0
1.6
4.8
6.6
5.8
1.6
3.6
2.1
3.0
2.4
Dec
0.6
0.9
0.6
1.6
1.1
2.6
4.3
3.5
1.0
2.5
1.6
1.6
1.5
1993
Mar
0.9
1.2
1.0
0.3
0.7
0.9
1.0
1.0
0.9
1.2
1.0
0.3
0.8
Jun
0.2
0.7
0.3
-3.0
-0.9
1.2
1.8
1.4
0.4
1.2
0.6
-3.0
-0.4
Sep
0.4
0.9
0.5
2.6
1.3
2.9
3.7
3.4
0.9
2.3
1.4
2.6
1.7
Dec
0.5
0.8
0.5
-0.3
0.2
0.4
0.0
0.2
0.4
0.4
0.4
-0.3
0.2
1994
Mar
-0.3
0.5
-0.1
-3.2
-1.1
-3.8
-4.1
-4.0
-1.0
-1.7
-1.3
-3.2
-1.8
Jun
1.2
0.4
1.0
-1.2
0.2
-0.3
0.0
-0.1
0.8
0.2
0.7
-1.2
0.2
Sep
0.4
-0.1
0.3
0.8
0.5
0.2
0.0
0.1
0.4
0.0
0.2
0.8
0.4
Dec
0.4
0.0
0.3
2.0
0.9
-1.4
-1.4
-1.4
0.0
-0.7
-0.2
2.0
0.4
1995
Mar
1.2
0.5
1.2
3.3
1.8
0.9
1.1
1.0
1.2
0.8
1.0
3.3
1.7
Jun
0.9
0.8
0.8
4.5
2.1
4.1
5.7
5.0
1.5
3.1
2.0
4.5
2.7
Sep
1.0
0.4
1.0
-1.5
0.1
-0.7
-2.7
-1.8
0.7
-1.1
0.2
-1.5
-0.4
Dec
0.4
0.2
0.3
-2.2
-0.5
-1.6
-2.0
-1.9
0.0
-0.8
-0.3
-2.2
-0.8
1996
Mar
-0.2
0.2
-0.1
0.0
-0.1
-1.0
-1.7
-1.3
-0.3
-0.8
-0.5
0.0
-0.4
Jun
0.2
0.3
0.2
-3.7
-1.2
-3.0
-4.5
-3.8
-0.5
-2.0
-0.9
-3.7
-1.7
Sep
0.5
-0.3
0.3
-1.0
-0.1
-0.3
-0.4
-0.3
0.4
-0.3
0.2
-1.0
-0.2
Dec
0.9
0.0
0.7
-1.8
-0.2
-0.8
-0.8
-0.8
0.5
-0.3
0.3
-1.8
-0.3
1997
Mar
0.7
0.3
0.5
1.3
0.8
0.2
-0.6
-0.3
0.5
-0.1
0.3
1.3
0.6
Jun
0.0
0.0
0.1
1.6
0.6
0.2
-0.4
-0.1
0.1
-0.2
-0.1
1.6
0.5
Sep
-1.2
0.3
-0.8
2.6
0.4
2.7
3.0
2.8
-0.4
1.5
0.3
2.6
0.8
Dec
0.3
0.3
0.3
3.0
1.3
3.9
3.8
3.8
1.0
1.9
1.3
3.0
1.8
1998
Mar
-0.5
0.2
-0.3
0.0
-0.3
1.5
0.8
1.1
-0.1
0.5
0.1
0.0
0.1
Jun
0.8
1.2
0.9
1.4
1.1
1.9
1.3
1.6
1.0
1.2
1.1
1.4
1.2

4.10 The following table provides a summary of some key data from table 5.

EXPERIMENTAL INDEX NUMBERS FOR JUNE QUARTER 1998
Base: 1989--90 = 100.0
Final goods

Consumption

Capital
Consumption plus Capital

Exports

Total
Domestically produced
118.7
118.3
118.6
101.2
118.8
Imports
126.2
121.2
123.5
. .
123.5
Total
120.2
119.6
120.0
101.2
114.1

4.11 It can be seen that over the period 1989–90 to June quarter 1998, the modest 11.8% increase for domestic Final goods can be attributed to the dampening effect of export prices. A marginal rise of 1.2% in Export prices over the period offset the much more substantial 18.6% increase in prices of goods destined for domestic final consumption and capital formation. When combined with imports the total Final goods index, excluding exports, rose by 20.0%.

4.12 A further observation is that for both domestic and imported Final goods, prices of consumption goods increased slightly more than prices of capital goods.

4.13 Returning to the table in paragraph 4.7, the index for domestic Intermediate (Stage 2) goods rose between 1989–90 and June quarter 1998 by less than the imported series (13.0% compared with 17.4%) leading to a 13.8% increase in the total Intermediate goods index.

4.14 For Preliminary (Stage 1) goods, the domestically produced series increased between 1989–90 and June quarter 1998 by a greater amount than the imports series (10.6% compared with 8.6%) resulting in an increase of 10.2% in the Preliminary goods index.

4.15 It is interesting to note the different impacts of import prices on the total indexes for each stage. In the case of Final goods, import prices had a substantial upward impact while for Intermediate goods, prices of imported goods had a more modest upward impact. However, for Preliminary goods import prices had a moderating influence.

4.16 Another observation is that, for each Stage, the series for imports is far more volatile than the series for domestic goods (see tables 4 and 6). This is largely attributable to exchange rate movements.

4.17 In summary, the growth in the index over the eight-year period for each stage progressively increases as shown below:

Preliminary goods

+10.2%
Intermediate goods
+13.8%
Final goods (excluding exports)
+20.0%.

4.18 The table in paragraph 4.10 shows that the 20.0% increase in Final goods (excluding exports) prices comprises price increases of 20.2% for Consumption goods and 19.6% for Capital goods. The 20.2% increase in the producer price index for Final Consumption goods can be compared with an increase of 23.1% over the same period for the goods component of the Consumer Price Index (table 7 of Consumer Price Index, June Quarter 1998 (Cat. no. 6401.0)). This indicates a continuation of the progressive increase in the growth of prices of goods as they advance along the production and distribution chain associated with, for example, wholesale, transport and retail margins being added to the value of the goods.

4.19 This progressive increase in the growth of goods prices over the eight-year period of study could be attributable to price pressures from other inputs, apart from goods. That is, prices of intermediate inputs of services as well as goods, labour costs, indirect tax rates and changes in profit margins also need to be considered. Prima facie, it could be deduced that, taken together, the prices of these other inputs rose at a greater rate than the prices of goods over the period, culminating in the progressive increases along the production and distribution chain.

4.20 Obviously a more complete statistical framework is required to support a rigorous study of inflation processes. A comprehensive SOP data model, intended for this purpose, is articulated in Chapter 5. Further analysis of the available data is also undertaken.






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