Producer Price Index QoQ

The Producer Price Index QoQ tracks quarterly price change for goods and services in Australia from producer perspective, which means seller prices. Its headline series is Final Demand excluding exports, which means broad domestic supply price change without export prices. It is published by the Australian Bureau of Statistics, the national statistical agency, using business surveys plus administrative data under catalogue number 6427.0. It does not measure consumer prices or living costs, which belong to the Consumer Price Index measured from buyer prices.

Price collection descends from the Melbourne index of 1912 while Stage of Production indexes began in July 2000 with series from September quarter 1998. Markets read it as a short term inflation signal for national accounts deflation and contract adjustment with no target level stated.

Prices are collected through each quarter ending March June September or December using tailored forms that reprice identical items. Results appear no later than 33 days after quarter end on Friday under embargo until 11:30am Canberra time. Each release includes key findings with main contributors plus tables spreadsheets methodology notes and calendar entry. Revisions apply only when new data change results significantly and revised values are marked with an explanation.

Headline moves reflect construction manufacturing energy and service prices.

• Final Demand excluding exports: broad index at basic prices including imports and excluding exports for domestic inflation focus.
• Output of Manufacturing industries: output prices at factory gate excluding excise and GST, the goods and services tax.
• Input to Manufacturing industries: prices paid delivered into store for domestic and imported inputs.
• Output of Construction industries: model pricing, which reprices a typical project, for building road and bridge work.
• Inputs to house construction and coal mining: materials delivered on site for houses and mine site inputs delivered net of discounts with GST excluded.
• Services industries output: business and household service prices at basic prices, which exclude taxes and margins.

In December quarter 2022 Final Demand excluding exports rose 0.7% to 123.2 and 5.8% over the year after 1.9% prior quarter. Building construction rose 1.6% Heavy and civil engineering rose 1.5% and computer and electronic equipment rose 4.2% on exchange rates. Petroleum refining fell 10.0% on lower crude and higher output Other agriculture fell 7.4% and electricity gas water fell 2.6%. Petroleum refining still rose 30.1% over the year despite the quarterly fall showing headline versus component divergence.

1. Elementary aggregate: Elementary aggregates use the Laspeyres form, which weights each price relative by value share. Four illustrative shares 30 20 10 40 with relatives 1.200 1.000 1.500 1.000 sum to 111.0, up 11.0%. Second period relatives 1.400 0.857 2.000 1.000 sum to 119.1, up 7.3% on period 1 and 19.1% since reference.
2. Weight form: Higher levels use the Lowe form with quantities fixed from 2018-19. Jevons equal weight geometric mean serves some lower aggregates.
3. Update and link: Price updated values roll forward by elementary movement. Results are expressed against link December quarter 2021, which joins old and new weights. The index base is 2011-12 equals 100.0.
4. Aggregate upward: Component price updated values sum into higher totals and convert against link values. Points contribution, which means a component share of headline move, applies only within one linking span.
5. Quarterly change: Divide the index point difference by the prior quarter index and multiply by 100. Never add quarterly rates across periods. For example 101.1 minus 94.7 equals 6.4 points, and 6.4 divided by 94.7 times 100 equals 6.8%.
6. Quality and gaps: Prices adjust to constant quality, which removes quality change value. Gaps fill from peer movement, and carry forward applies only where no transactions occur.