|
|
| Information about the Producers Price Index |
Availability
| Valid From: .. | 12/01/1977 |
| To: .. | Ongoing |
| Frequency: .. | Quarterly |
Design
Purpose:
Price indexes are used to measure changes in the level of prices, not the actual level of the prices themselves.
The Producers Price Index (PPI) measures prices relating to the production sector of the economy. By comparison the Consumers Price Index measures prices relating to the household sector and the Labour Cost Index measures prices in the labour market.
The PPI has two types of indexes: the outputs indexes,which measure changes in the prices received by producers and the inputs indexes,which measure changes in the cost of production (excluding labour and capital costs).
General Information ..
Population and Sample Size
1. Interpretation
A price index measures the change in prices between time periods, not the actual level of prices. A price index does not measure the cost of living or production, the value of production, or any other facet where factors other than price are allowed to vary (such as quantity).
A price index measures price changes for a fixed set of goods and services. For any set of goods and services, a representative subset (a "basket") is selected for pricing. This subset is a sample of the total population of prices, and is intended to represent price changes for the complete set of goods and services being studied.
A price index is conventionally expressed to a base of 1000 in a particular time period such as a month or quarter which is referred to as the base period. An index is “based” in one particular time period when the regimen weights and base prices were derived. This weighting base may not necessarily be the expression base (the expression base is when the index has a value of 1000).
Price indexes are 'unitless'. This means that the significance of a series of index numbers lies in their relative values. A single index number has no information value. In order for an index to provide information on price change, at least two index numbers from the same series are required to derive the change in price. The index numbers must relate to the same basket of goods and services and to the same expression base period to give a meaningful result.
Characteristics
-A Statistical Measure
A price index is a statistical measure. In a price index the goods and services priced are a sample of the total range of commodities traded. It is not a definitive measure like accounting aggregates such as sales or expenditure that can be expected to total to an exact value. In addition, the expenditure and sales information that is used to weight the component parts of an index is also obtained from samples of information from producers and consumers. As a consequence, the results have certain properties such as variability, sample and non-sample error and limited scope or boundaries, all of which can result in the price change identified varying from the true or ideal value. Consequently, the inflation measures produced by Statistics NZ are estimates of the actual change in prices. Over time they will fluctuate above and/or below the true inflationary path.
-Accuracy of an index
The degree of accuracy of a price index will vary depending on the particular characteristics of the index chosen. The nature of the commodities measured will be one factor affecting accuracy. Some areas, such as services, are known to be particularly difficult to quantify and price, because of quality issues, both the level and quality of output are often difficult to accurately identify and price. Furthermore, the level of disaggregation may affect quality, with indexes at the finest level generally being of lower “stand alone” quality than indexes at a more aggregated level.
-Laspeyres base weighted indexes
Most indexes currently produced by Statistics NZ are Laspeyres base weighted indexes. That is, the regimen weights are fixed at the base period of the index and do not vary until the index is reweighted or redeveloped.
-Building Block structure
Typically, Statistics NZ price indexes are constructed in a hierarchical manner. At the lowest level actual price quotes are used to calculate indexes. These index results then form the building blocks for higher level indexes. An example of this structure for the PPI Machinery and Equipment outputs index is given below in Figure 1.
-In general
In general, the degree of accuracy of an index varies depending upon the nature of the commodity group or industry being measured and the level within the hierarchy from which it is drawn. In most instances there is a trade-off between choosing an index that relates specifically to an area of interest (i.e. has an appropriate scope) and the statistical accuracy of the index in terms of its variability, and the sample and non-sample error of the underlying data and other statistical properties.
-User judgement
The choice of an index is ultimately a matter of judgement on the part of the user. The strengths and weaknesses of the range of possible measures must be assessed against the users’ requirements.
2. Producers Price Index
The Producers Price Index measures prices relating to the production sector of the economy. By comparison the Consumers Price Index measures prices relating to the household sector and the Labour Cost Index relates to prices in the labour market.
The Producers Price Index has two types of indexes. First, the output indexes, which measure changes in the prices received by producers. Second, the input indexes, which measure price changes in the cost of production (excluding labour and capital costs).
The inputs index does not fully measure changes in production costs. This is because production costs are not solely dependent on price movements but are also dependent on factors that affect productivity, such as technological advances, management efficiency and climate fluctuations (factors influencing volume). Similarly the outputs index measures the price movements of a fixed basket of goods. Therefore changes in production may not necessarily be represented in the index. Periodic re-basing of the index attempts to overcome these limitations in the PPI.
3. Output Indexes
The output indexes measure changes in prices received by producers.
The output indexes cover the prices of:
- primary products
- manufactured goods
- revenue from renting and leasing
- the provision of services
- capital work undertaken by own employees
- margins on goods purchased for resale
Excluded from the output indexes are:
- interest and dividends
- royalties and patent fees
- receipts from insurance claims
- government cash grants and subsidies
- GST and other indirect taxes
These indexes are designed to measure price changes at a level corresponding to the price at the "factory door", before the addition of commodity taxes or deduction of subsidies (i.e. the price received by the producer).
4. Input Indexes
The input indexes measure price changes in costs of production excluding labour and depreciation costs.
The input indexes cover the prices of:
- materials
- fuels and electricity
- transport and communication
- commission and contract services
- rent and lease of land, buildings, vehicles and plant
- business services
- insurance premiums less claims
Excluded from the indexes are:
- wages and salaries (measured in the Labour Cost Index)
- capital expenditure (measured in the Capital Goods Price Index)
- ACC levies, land tax, government licence fees, road user charges
- rates
- royalties, patent fees
- bad debts and donations
GST is excluded when measuring input prices for 45 of the 47 industry input indexes. The assumption is made that those involved in activities in these industries are 'registered persons, or businesses' who provide 'taxable supply'. GST paid on intermediate consumption is recoverable under the GST credit offset system and therefore is effectively not part of the ultimate input price. Exceptions include the finance, and the ownership of owner-occupied dwellings indexes which include some 'GST exempt', and non-recoverable GST activities.
Interest costs are excluded because they are regarded as a cost of capital and not as a payment for goods or services.
Government charges are excluded when they are used to raise tax revenue rather than the payment for a good or service purchased from the government. This is consistent with the System of National Accounts.
5. Usage
The PPI can be used in the analysis of inflationary trends, in economic forecasting and in the estimation of real economic growth. The index is also used to determine the increases/decreases allowable under indexation clauses in commercial contracts.
6. Coverage
The PPI is calculated quarterly from price quotes, which are collected mainly by the Commodity Price Survey. Approximately 13,000 individual commodity items are surveyed from about 3,000 respondents. Prices are generally collected each quarter with the price at the 15th of the middle month of the quarter being measured. Prices may be obtained monthly or annually depending on the nature of the item. Some commodities are not directly priced but are derived from other data sources. For example revenue and volume data is sometimes used to calculate unit prices.
Other sources of price data used in the PPI include prices collected for the Consumers Price Index, Labour Cost Index and Overseas Trade Indexes. Publicly available data is also used, including prices published in regular publications, meat schedules, and the like.
Price quotes are generally used in more than one outputs industry index, representing the prices received by producers for both representative and non representative commodities produced by that industry. For example wool prices are collected mainly for the livestock and cropping farming outputs index. However, wool is also produced by groups like the dairy cattle farming, horticulture and fruit growing industries, hence wool prices are included in these indexes as a ‘non representative’ output.
The price quotes are also used in the input indexes and often occur in more than one index. For example nearly every industry consumes electricity during the production process, hence electricity prices are used in nearly every inputs price index.
7. Weightings
Regimens, which are lists of goods/services and their respective weights in each index, are available from Statistics NZ. Below is an example of the regimen for the Machinery and Equipment index. It shows the weights for the inputs index on the left and the outputs index on the right:
8. PPI Redevelopment
As the economy is in a continual state of change, index maintenance is ongoing. A program to redevelop all the industry indexes began in 1995 and was completed in August of 1998.
The main achievement of the PPI redevelopment was the reweighting of the industry and All Industries indexes. The new weights reflect the most recent information on business expenditure and revenues and as a result the indexes reflect more recent patterns of economic activity.
A special Producers Price Index (PPI) Redevelopment Release was published on 9 June 1998 outlining the redevelopment's major achievements. 
A new program to redevelop all the commodity and industry indexes commenced in July 2003. After the completion of this redevelopment, a rolling review program will be implemented to ensure the commodity and industry indexes are kept up to date.
9. Industry Classification
From the June 1998 quarter the PPI tables were redesigned to publish indexes based on new ANZSIC industry groupings at a level of interest and significance to users. This replaced the production groups and institution sector groups that were previously used. These industries are consistent with the groupings used in the National Account's 1996 Full Inter-Industry study, published in 1999.
An unofficial back series for the new ANZSIC industry indexes is available from the June 1994 quarter, which provides an overlap to the new series. The old series was discontinued from the June 1998 quarter.
The activities carried out by government and non-profit organisations have been reorganised into industries based on ANZSIC groupings. This replaces the institutional sectors that were previously used. Indexes for Community and Personal Services; Central Government; Local Government; and Private Non-profit Services have been reorganised into indexes for Personal and Other Community Services; Public Administration and Defence; Education; Health and Community Services; and Cultural and Recreation Services.
10. Calculation
The PPI is a Laspeyres base-weighted price index series.
The general form of the Laspeyres formula is:-
Where L01 = Laspeyres Price Index
p0,p1 = Prices in periods 0 and 1, respectively
q0 = quantity in period 0
This is known as the “Expenditure Aggregative” form. The Laspeyres Index is also expressed in a second form, called the “Weighted Price Relatives”. The derivation is given below.
Where
and
Then
Let w = p0q0, then
and if  = 1000 thenwhere  = “price relative”
w = “Weight” i.e. the expenditure in the base period.
11. Index Base
Weighting Base
The weighting base of an index refers to the year or years from which the weighting data was derived. It is normally set as the financial year used for the latest economic census or sample survey available for a particular industry. For example, for a reference financial year of 1995-96 in a Statistics NZ annual survey, businesses provide information from their accounts for the 12 months ending 30 September 1996. The weighting data therefore approximates March year results. As a rolling revision was used in the latest redevelopment, the weighting base is generally different for each industry. As a result of this approach the most up-to-date weighting data is used for each industry as they are redeveloped.
Calculation Base
The calculation base of an index is the reference period (i.e. month or quarter) in which the base period prices are selected, that is, where the price is = p0. It is normally set in the latest reference period for which pricing information is available at the time an index is redeveloped. In line with weighting bases, calculation bases will vary by industry or commodity.
Expression Base
The expression base of an index is the reference period (i.e. month or quarter) - when they have the same expression base they can be used to compare. This is where the indexes are set at 1000. Changing the expression base of an index from one quarter to another is a matter of convenience and does not change the meaning of the index. The relative values between each period are unchanged by this process.
Users may wish to re-express an index in terms of a common expression base to allow comparison of series with differing expression and/or weighting bases.
Although the expression period can be arbitrary, a December quarter is normally chosen. From the June 1998 quarter, the expression base of the PPI indexes was changed to the December 1997 quarter. As a consequence, prices prevailing at the mid-point of the December quarter (i.e. 15 November 1997) will be used to compare future prices, until the expression base is once again updated. The previous PPI expression bases were the December 1982 quarter, and prior to that, the December 1977 quarter.
PV/CP/01 - Commodity Price Survey
Questionnaires are specific to respondents
Output Variables
Output variables are pieces of individual information that can be extracted from the survey/output data. Often output variables can be cross tabulated with other output variables, for example sales by industry classification. The list below contains all current and past output variables which have been released for this survey/output.
Below is a list of published indexes. This published index structure became official from the June 1998 quarter.
An unofficial backseries has been created to the June 1994 quarter. There are also a number of unreleased series
available, which are not listed here.
Input Indexes: INFOS Series identifier
A. Agriculture, Forestry and Fishing PPIQ.SNA
A01. Horticulture and fruit growing PPIQ.SNA01
A02. Sheep and beef farming PPIQ.SNA02
A03. Dairy cattle farming PPIQ.SNA03
A04. Cropping and other farming PPIQ.SNA04
A05. Services to agriculture, hunting and trapping PPIQ.SNA05
A06. Forestry and logging PPIQ.SNA06
A07. Fishing PPIQ.SNA07
B. Mining PPIQ.SNB
C. Manufacturing PPIQ.SNC
C01. Meat and meat product manufacturing PPIQ.SNC01
C02. Dairy product mfg PPIQ.SNC02
C03. Other food manufacturing PPIQ.SNC03
C04-5. Tobacco, beverage and malt manufacturing PPIQ.SNC04
C06. Textile and apparel manufacturing PPIQ.SNC06
C07. Wood product manufacturing PPIQ.SNC07
C08. Paper & paper product manufacturing PPIQ.SNC08
C09. Printing, publishing & recorded media PPIQ.SNC09
C10. Petroleum, coal and basic chemical manufacturing PPIQ.SNC10
C11. Rubber, plastic and other chemical product mfg PPIQ.SNC11
C12. Non-metallic mineral product manufacturing PPIQ.SNC12
C13. Basic metal manufacturing PPIQ.SNC13
C14. Structural, sheet and fabricated metal product mfg PPIQ.SNC14
C15. Transport equipment manufacturing PPIQ.SNC15
C16. Machinery & equipment manufacturing PPIQ.SNC16
C17. Other manufacturing PPIQ.SNC17
D. Electricity, Gas and Water PPIQ.SND
D01. Electricity generation and supply PPIQ.SND01
D02. Gas supply PPIQ.SND02
E. Construction PPIQ.SNE
F. Wholesale Trade PPIQ.SNF
G. Retail Trade PPIQ.SNG
H. Accommodation, Cafes and Restaurants PPIQ.SNH
I. Transport & Storage PPIQ.SNI
I01. Road transport PPIQ.SNI01
I03. Water transport PPIQ.SNI03
I04. Air transport PPIQ.SNI04
I09, I02 Rail & other transport, storage and services PPIQ.SNI09
J. Communication Services PPIQ.SNJ
K. Finance and Insurance PPIQ.SNK
K01. Finance PPIQ.SNK01
K02. Insurance PPIQ.SNK02
K03. Services to finance and insurance PPIQ.SNK03
L. Property and Business Services PPIQ.SNL
L01. Real estate PPIQ.SNL01
L02. Ownership of owner-occupied dwellings PPIQ.SNL02
L03. Other property services PPIQ.SNL03
L04. Business services PPIQ.SNL04
M. Public Administration and Defence PPIQ.SNM
M.01 Central Government and Defence PPIQ.SNM01
M.02 Local Government and Civil Defence PPIQ.SNM02
N. Education PPIQ.SNN
O. Health and Community Services PPIQ.SNO
P. Cultural and Recreational Services PPIQ.SNP
Q. Personal & Other Community Services PPIQ.SNQ
X.
X01. Agriculture PPIQ.SNX01
X05. Food, Beverages and Tobacco PPIQ.SNX05
X08 Paper, Printing and Publishing PPIQ.SNX08
X09 Chemicals, Petroleum and Plastics PPIQ.SNX09
X12 Machinery and Metal Products PPIQ.SNX12
All Industries excl. Administration, Health and Education PPIQ.SN8
All Industries PPIQ.SN9
Output Indexes:
A. Agriculture, Forestry and Fishing PPIQ.SUA
A01. Horticulture and fruit growing PPIQ.SUA01
A02. Livestock and cropping farming PPIQ.SUA02
A03. Dairy cattle farming PPIQ.SUA03
A04. Other farming PPIQ.SUA04
A05. Services to agriculture, hunting and trapping PPIQ.SUA05
A06. Forestry and logging PPIQ.SUA06
A07. Fishing PPIQ.SUA07
B. Mining PPIQ.SUB
C. Manufacturing PPIQ.SUC
C01. Meat and meat product manufacturing PPIQ.SUC01
C02 Dairy product manufacturing PPIQ.SUC02
C03. Other food manufacturing PPIQ.SUC03
C04-5 Tobacco, beverage and malt manufacturing PPIQ.SUC04
C06. Textile and apparel manufacturing PPIQ.SUC06
C07. Wood product manufacturing PPIQ.SUC07
C08. Paper & paper product manufacturing PPIQ.SUC08
C09. Printing, publishing & recorded media PPIQ.SUC09
C10. Petroleum, coal and basic chemical manufacturing PPIQ.SUC10
C11. Rubber, plastic and other chemical product mfg PPIQ.SUC11
C12. Non-metallic mineral product manufacturing PPIQ.SUC12
C13. Basic metal manufacturing PPIQ.SUC13
C14. Structural, sheet and fabricated metal product mfg PPIQ.SUC14
C15. Transport equipment manufacturing PPIQ.SUC15
C16. Machinery & equipment manufacturing PPIQ.SUC16
C17. Other manufacturing PPIQ.SUC17
D. Electricity, Gas and Water PPIQ.SUD
D01. Electricity generation and supply PPIQ.SUD01
D02. Gas supply PPIQ.SUD02
E. Construction PPIQ.SUE
F. Wholesale Trade PPIQ.SUF
G. Retail Trade PPIQ.SUG
H. Accommodation, Cafes and Restaurants PPIQ.SUH
I. Transport & Storage PPIQ.SUI
I01. Road transport PPIQ.SUI01
I03. Water transport PPIQ.SUI03
I04. Air transport PPIQ.SUI04
I09, I02 Rail & other transport, storage and services PPIQ.SUI09
J. Communication Services PPIQ.SUJ
K. Finance and Insurance PPIQ.SUK
K01. Finance PPIQ.SUK01
K02. Insurance PPIQ.SUK02
K03. Services to finance and insurance PPIQ.SUK03
L. Property and Business Services PPIQ.SUL
L01. Real estate PPIQ.SUL01
L02. Ownership of owner-occupied dwellings PPIQ.SUL02
L03. Other property services PPIQ.SUL03
L04. Business services PPIQ.SUL04
P. Cultural and Recreational Services PPIQ.SUP
Q. Personal & Other Community Services PPIQ.SUQ
X.
X01. Agriculture PPIQ.SUX01
X05. Food, Beverages and Tobacco PPIQ.SUX05
X08 Paper, Printing and Publishing PPIQ.SUX08
X09 Chemicals, Petroleum and Plastics PPIQ.SUX09
X12 Machinery and Metal Products PPIQ.SUX12
All Industries PPIQ.SU9
Changes in Output Variables over time
Guide to Interpreting Data
Summary of Changes to Survey/Output ..History of the Producers Price Index
| 1920 | The Wholesale Price Index (WPI) was made available. |
| 1958 | The WPI was rebased. |
| October 1959 |
The rebased WPI was published in the October 1959 Monthly Abstract of Statistics.
|
| January 1975 |
The Inter-Departmental Committee on Statistical Needs and Priorities recommended rebasing of the WPI.
|
| May 1975 |
The outline of an index structure to replace the WPI was established.
|
| July 1975 |
The "Price Index Number Research and Development Section" was formed and commenced work on the index that would become the PPI.
|
| September 1976 |
The quarterly postal survey of commodity prices commenced.
|
| July 1978 |
The PPI was first published under the name of the General Price Index, indexes being for the base quarter of December 1977 and the following March 1978 quarter. Some indexes for example, Construction outputs and Financing & Insurance outputs were not completed at this time. Initially, all calculations were done manually.
|
| November 1979 |
The September 1979 quarter PPI release was the first calculated by the computerised Generalised Index System (GIS).
|
| November 1980 |
Output indexes were published for the Construction and Financing & Insurance groups.
|
| August 1981 |
The index name was changed from General Price Index to Producers Price Index.
|
| 1982/83 |
During the first year of the PPI progressive rebase cycle, the indexes for Agriculture, Mining & Quarrying, Electricity, Gas and Water; Wholesale & Retail Trade, Accommodation & Cafes etc., and Transport & Storage were revised. Sub-group indexes for some of these five revised groups were also produced. The expression base for all PPI indexes was updated from the December 1977 quarter to the December 1982 quarter. The All-Groups weights were revised.
|
| 1983/84 |
The second phase of the rebase was completed - 5 industry production group indexes were rebased, Fishing & Hunting; Forestry & Logging; and Personal & Community Services (inputs and outputs); and Local Government Services; and Private Non-profit Services to Households (inputs).
|
| 1984/85 |
The third phase of the rebase was completed - indexes for the nine manufacturing industry production groups and for Owner-Occupied Dwellings were rebased, as were the weights used in the calculation of the various All Groups Indexes. A number of adhoc indexes were also constructed.
|
| 1985/86 |
The fourth phase of the rebase was completed - indexes for Communication Services; Finance; Insurance; Property & Business Services; and Central Government Services inputs were rebased.
|
| 1986/87 |
The fifth phase of the rebase was completed - the input index for Construction was rebased. The treatment of GST was determined and applied.
|
| 1987/88 |
The sixth phase of the rebase was completed - the output index for Construction, was rebased.
|
| 1989/90 |
The second PPI rebase cycle commenced with the rebase of the index for Fishing & Hunting.
|
| 1992 |
Rebased indexes completed for the Agriculture Inputs index, Transport and Storage index.
|
| 1995 |
Decision made to rebase the entire Producers Price Index.
|
| March 1996 |
Industrial classification for the PPI changed from NZSIC to ANZSIC. First rebased index (Agriculture) completed.
|
| September 1996 |
Rebased indexes completed for Forestry & Logging; Fishing & Hunting; and Trade, Restaurants & Hotels.
|
| December 1996 |
Rebased indexes completed for Mining & Quarrying; Electricity, Gas & Water; and Financing & Insurance.
|
| March 1997 |
The rebased index for Paper, Printing & Publishing completed.
|
| June 1997 |
The rebased index for Food, Beverages & Tobacco completed.
|
| September 1997 |
The rebased indexes for Chemicals, Petroleum & Plastics; Construction; and Communications completed.
|
| December 1997 |
The rebased indexes for Textiles, Apparel & Leather; Wood & Wood Products; Non-metallic Mineral Products; Basic Metals; Machinery & Metal Products; Other Manufacturing; Transport & Storage; & Ownership of Dwellings completed.
|
| March 1998 |
The All Industry Groups rebase completed.
|
| June 1998 |
The PPI Redevelopment release is published.
|
| August 1998 |
The June quarter's PPI release is the first with the new published ANZSIC index structure. The PPI tables are rebased to the December 1997 quarter. Commodity Price indexes are introduced.
|
Usage and Limitations of the Data ..Non Response Bias
The indexes are based on prices collected from respondents. Where there is no response for a particular period, the price is imputed. In most cases, the price is imputed by taking the most recently available price and carrying it forward. This means the index shows a bias toward no change. Should a respondent not respond for several periods a bias occurs towards no change.
Laspeyres Bias
Laspeyres indexes are subject to substitution bias arising from their fixed base weight structure. Bias can arise due to:
- Changing production outputs - substitution
This relates to output indexes. Over time, commodities can change, and producers, in reaction to consumer substitution, may in due course substitute high priced outputs with low priced outputs. Although respondents may still be able to provide prices for the original commodity, over time, weighting information becomes unrepresentative of an industry. Often the problem is compounded since the price movements of the substituted commodity may not be representative of the price movements of the original (more appropriate) commodity. For example a printing and publishing respondent who previously did large print jobs finds the market for such jobs reduces, and so specialises in smaller print runs. However the respondent is still able to price a large print job when this might not be appropriate.
- Changing production outputs - new production outputs
This relates to output indexes. New products that enter the market are not immediately priced unless they directly replace an existing item, for example cell phones.
- Changing production methods - substitution between production methods
This relates to the input price indexes. Changing price patterns mean that over time it might be advantageous for a producer to change their method of production. For example a large factory may have used electricity as its main source of energy but decides to convert to gas, based on price changes. The existing weighting on electricity in the index therefore becomes too large and the weight on gas becomes too small.
- Changing production methods - new technology/methods
This relates to input indexes. Changing technologies may mean that a different mix of commodities is used to produce the same output. For example new steel smelting technology may use a different grade and amount of coal to produce the same amount of steel as the old technology.
Poor quality information from respondents
The indexes are based on information from respondents, however accurate information can in some instances be difficult to obtain. The response rate is 97% percent, however this may be misleading as many respondents find it more convenient to indicate "no change" on their questionnaire than provide actual prices.
Related Data Sources ..
- Capital Goods Price Index (Capital purchases are excluded from the PPI Inputs)
- Labour Cost Price Index (Labour costs are excluded from the PPI Inputs)
- Farm Expenses Price Index (Included in the PPI at an aggregate level)
- Consumers Price Index (Household sector price index)
- GDP Deflators (GDP constant price series)
Sampling Errors ..The PPI is based on a purposive sample of commodities, which have been selected to reflect the price changes for the particular commodity or industry measured. Due to the sampling methodology sample errors cannot be calculated.
Non-sampling errors Non-sampling errors in the survey data may result from errors in the sample frame, respondent error, mistakes made during processing survey results and non-response imputation. Statistics NZ adopts procedures to detect and minimise these types of errors but they may still occur and are not quantifiable.
Caveats on Release ..Users should note that the dynamic nature of many industries mean that weights can quickly become unrepresentative of the current patterns of economic activity.
Revisions policy
The PPI is revised only for significant errors. That is, an error resulting in a change of three or more index points. Revisions are not made where current prices become available when lagged prices were used in the calculation, or where actual prices used are adjusted in retrospect. Revisions are notified by an R beside the revised number in the PPI Tables.
Liability
Statistics New Zealand gives no warranty that the information or data supplied contains no errors. However, all care and diligence has been used in processing, analysing and extracting the information. Statistics New Zealand shall not be liable for any loss or damage suffered by the customer consequent upon the use directly, or indirectly, of the information supplied in this product.
These indexes tend to be used either for general economic analysis or in cost escalation situations. Some customers have been receiving these indexes for 10 -15 years.
Catalogue & Reference Numbers
Table 1 Producers Price Index, Outputs – index numbers
2 Producers Price Index, Inputs – index numbers
3 Producers Price Index, Outputs – percent change from previous quarter
4 Producers Price Index, Inputs – percent change from previous quarter
5 Producers Price Index, Selected commodities – index numbers and percentage changes
Key Statistics
Table 6.07 Producers Price Index, Outputs
6.08 Producers Price Index, Inputs
Other Comments
Classification(s) used
Classifications |
Classification Versions |
Classification Type |
ANZSCC - Australian and New Zealand Standard Commodity Classification 1996 |
V1.0 |
NZ Standard |
ANZSIC96 - Australian and New Zealand Standard Industrial Classification - NZ Version 1996 |
V4.1 |
NZ Standard |
Glossary of Terms
| Term | Description |
| All Industries Index | The index series showing price movements for the weighted combination of all industry indexes. |
| ANZSIC | Australian and New Zealand Standard Industrial Classification 1996. |
| Basic prices | The price received by the producer exclusive of indirect taxes (less subsidies), and transport and trade margins (i.e. the ex-plant price). |
| Basket of goods and services | The selection of goods and services comprising an index. The basket of goods and services selected for the PPI is essentially fixed, i.e. the goods and services are selected in the base year, and remain constant for the life of the index. |
| Building block structure | A hierarchical structure used to organise the PPI indexes. Under this structure price quotes feed into commodity indexes, which feed into industry indexes that feed into the all groups indexes. The benefits of this structure include increased industry detail, analytical capability and the ability to undertake progressive reweighting. |
| Calculation base | The reference period used for comparison of prices for a specific index. |
| Classification | The systematic ordering of information in categories. |
| Commodity | A good or service for which a price is collected. |
| Contract escalation/Contract indexation. | The practice of amending nominal contract values for price change over time. |
| Expression base | The reference period used for comparison of prices, usually when the index =1000. The expression base for the PPI is the December 1997 quarter. |
| Fixed weight price index (or base weighted index) | A price index in which the quantity of an item purchased is assumed to be constant or fixed at the base period for the life of the index. The PPI is a fixed weight index. |
| Hot off the Press | A standard publication release used by SNZ. |
| Imputation | The estimation/calculation of an unknown value based on relevant available information. |
| Index number | A weighted average of the price ratios of selected goods, services, commodities or financial assets measured over time. |
| Industry | Collectively organised economic activity as defined by an industrial classification. |
| Inflation | An increase in the general level of prices of commodities over a period of time. |
| Input index | Measures price changes in costs of production excluding labour and depreciation costs. |
| Item | A good or service for which a price is collected/calculated. |
| Item weights | Comparative emphasis assigned to an item when compiling an index. Estimated based on the dollar value of production or intermediate consumption (price times quantity). It is an estimate of the overall significance of each of the different items in the price index basket of goods and services. |
| Laspeyres index | A price index measuring the changing price over time of purchasing the same basket of commodities purchased in a specific base period.
The Laspeyres index formula is outlined in Chapter 3. |
| Non-representative commodities | Goods and services that are not characteristically produced by an industry. |
| Non-response | Non-response results when a respondent or group of respondents fails to provide information when surveyed. |
| NZSIC | New Zealand Standard Industrial Classification. |
| Output index | Measures changes in prices received by producers. |
| Paasche index | A price index formula that compares the current cost of a basket of goods with the cost of that basket at base year prices. |
| Percentage change | The change in value from one period to another expressed as a percentage of its value in the first of the two periods. |
| Price index | Measures price change for a fixed set of goods and services. |
| Purchasers' price | The amount paid by the purchaser inclusive of indirect taxes (less subsidies), trade margins (wholesale and retail) and transport costs. That is, the price for commodities supplied to the purchaser. |
| Purposive sampling | The selection of items to price using information from a variety of sources including interviewers and field-testing. It usually involves an element of judgement in the selection process. |
| Quarter | The PPI is produced on a quarterly or 3 monthly basis. This includes the March, June, September and December quarters. |
| Rebasing | The process of updating the expenditure weights of the index and commodities priced to maintain relevance. |
| Regimen | The selection of goods and services whose prices are surveyed for the purpose of compiling a price index. This specifies the goods and services that are price surveyed and their relative expenditure weights. |
| Representative commodities | Goods and services that are characteristically produced within an industry. |
| Revision | A correction to a published PPI index number. The PPI is revised only for significant errors (i.e. an error resulting in a change of three or more index points for a published index number). Exceptions include where current prices become available when lagged prices were used in the calculation, or where actual prices used are adjusted in retrospect. An R being placed beside the revised number in the PPI tables notifies revisions. |
| Sample frame | An organised list of all existing outlets from which a statistical sample can be selected. |
| Seasonality | Some commodities are seasonal, (i.e. only produced at a particular time of the year). |
| Seasonal treatment | Prices for seasonal commodities are carried forward until the next season's trading occurs, and a new price can be collected. |
| Splicing | The joining of price series of two or more different items in order to provide a continuous price series. |
| Weight | The measure of the relative importance of an item in the index. |
| Weighting base | The period for which information was obtained which was used to form the regimen of the index. |
Contact Details
Liability
Statistics New Zealand gives no warranty that the information or data supplied contains no errors. However, all care and diligence has been used in processing, analysing and extracting the information. Statistics New Zealand shall not be liable for any loss or damage suffered by the customer consequent upon the use directly, or indirectly, of the information supplied in this product.
|
|