Producer Price Index MoM

The Producer Price Index, or PPI, is a monthly business-cycle gauge of factory-gate prices, and MoM means change versus the prior month. The European Commission compiles it through Eurostat, the European Union statistical office, as part of short-term business statistics and a Principal European economic indicator. It covers ex-works domestic sales excluding imports for NACE Rev.2 sections B to D plus division E36, using actual transaction prices excluding VAT. It captures price moves before retail, so it foreshadows inflation but does not measure consumer prices or living costs.

Eurostat releases the index once a month on preannounced dates at 11:00 Luxembourg time, about 1 month and 5 days after the reference month. Prices refer to orders booked during the reference month, and the European aggregate appears only when reporting countries cover at least 60% of weights. Each release shows MoM and YoY change by industrial grouping and member state, including total industry excluding energy, plus index levels with 2021 as 100. Data are revised each month as countries update figures, errors are corrected at once, and large method changes are announced in the release. Notes cover revisions, methods, geography and database links.

The domestic headline reflects five industrial groupings, with energy usually driving the largest swings.

• Energy: is the most volatile grouping and dominates headline moves in crises.
• Intermediate goods: covers inputs used for further production.
• Capital goods: covers machinery and investment goods.
• Durable consumer goods: covers long-lived consumer products.
• Non-durable consumer goods: covers short-lived products including food and can diverge from the headline.
• Total industry excluding energy: is the core read without energy.

In its 4 November 2022 release, the euro area rose 1.6% on the month and 41.9% on the year in September 2022. Energy drove the surge with a 108.2% yearly gain versus 14.5% excluding energy. Intermediate goods rose 19.0%, non-durable goods 15.2%, durable goods 9.8% and capital goods 7.6%. On the month, energy rose 3.3% versus 0.4% excluding energy.

August 2022 had risen 5.0% on the month, unchanged in revision, while its yearly rate moved from 43.3% to 43.4%. The index had risen by almost two thirds between May 2020 and September 2022 to 143.3 points, its all-time high.

1. Transaction price: Collect actual selling prices, not list prices, for orders booked in the month, with quality change removed so only pure price change remains. Record revenue to the producer, excluding VAT and duties, plus product subsidies, with non-domestic prices at national frontiers on a free-on-board basis.
2. National index: Combine product price relatives versus the base year by turnover weights into an index set at 2021 as 100. Weights and base year are generally reviewed every 5 years.
3. Euro-area aggregation: Average national indices by each country's turnover share to form the euro-area index, combining domestic and non-domestic markets. Methods can differ across countries, and the aggregate appears only with at least 60% weight coverage.
4. Monthly and yearly change: Compute MoM change versus the prior month and YoY change versus 12 months earlier, both from unadjusted data.
5. No seasonal adjustment: Publish figures without calendar or seasonal adjustment, since prices do not depend on working days. Users seeking clean trends strip price change from values, then remove seasonality from volumes.