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INPUT PRODUCER PRICE INDICES

Statistics Directorate    
Definition:
A measure of the change in the prices of goods and services bought as intermediate inputs by domestic producers. Covers both domestically-produced intermediate inputs and imported intermediate inputs. Valuation is at
purchasers’ prices.

Context:
Thus an input producer price index (PPI) measures changes in the cost of the basket of purchases required as inputs into the production process, but these inputs must not be primary inputs like land, labour or capital inputs. Producer input prices should exclude deductible taxes on products (i.e. VAT) but include the retail or wholesale margins of the supplier, since they measure the actual cost of the good or service to the producer.

In constructing a family of input PPIs, import prices are usually collected from a separate source to produce a separate import price index. (Draft Producer Price Index Manual, The Technical Expert Groups on the Producer Price Index, Part 1 - The Theory and Concepts of PPI Measurement, Chapter 2. The Purpose and Uses of Producer Price Indices, paras. 2,3,5,6).

Source Publication:
ILO, IMF, OECD, Eurostat, UNECE, World Bank, 2004, Producer Price Index Manual: Theory and Practice, International Monetary Fund, Washington DC.

Cross References:
Output producer prices
Producer price index

Hyperlink:
http://www.imf.org/external/np/sta/tegppi/index.htm

Statistical Theme: Prices and purchasing power partities

Created on Tuesday, July 30, 2002

Last updated on Friday, December 02, 2005