Producer Price Index MoM

The Producer Price Index MoM tracks Eurostat's Industrial producer prices for the domestic market: the month-on-month change from the prior month. Eurostat, the EU Statistical Office, publishes it under Short-Term Business Statistics as one of the Principal European Economic Indicators. It covers industry under NACE Rev.2: B (Mining and quarrying), C (Manufacturing) and D (Electricity, gas, steam and air conditioning supply). Division E36 (Water collection, treatment and supply) completes total industry.

It measures ex-works (factory-gate) actual transaction prices, not list prices, in national currency for domestic sales excluding imports. Prices use the basic price minus VAT (value-added tax) plus subsidies, quality-adjusted like-for-like. Prices refer to orders booked in the reference month; the index aims at that month's average.

The calendar month is the reference period, with no single EU-wide collection day. Data come via surveys or administrative sources, reaching Eurostat within one month of month-end. Eurostat publishes monthly at 11:00 CET on pre-announced dates, finalised each Friday. Release usually comes early in the second month after, about five weeks later.

The ECB (European Central Bank) gets the data under embargo the evening before release. Agencies get it an hour before, national institutes two hours before. Each release gives euro-area and EU indices plus month-on-month and year-on-year tables by grouping and country.

European aggregates are revised monthly; errors are fixed at once with an error report, and large methodology changes announced in the monthly releases. It is among the least-revised price indicators.

The headline (the total) mainly reflects energy; other groupings are calmer.

• Energy: fuels, electricity and gas; the most volatile driver of headline swings.
• Intermediate goods: inputs like metals, chemicals and parts for making other goods.
• Capital goods: machinery and equipment for production and investment.
• Durable and non-durable consumer goods: long-lived items like appliances and furniture, plus short-lived ones like food and clothing.
• Total industry excluding energy: industry minus energy, showing non-energy momentum.
• Domestic and non-domestic market: separate by buyer residency; non-domestic splits into euro area and non-euro area for euro-area countries. The EU monthly figure is that domestic-market index.

In December 2023 (released 5 February 2024) EU prices fell 0.9% on the month and 10.0% on the year. Euro-area prices fell 0.8% on the month and 10.6% on the year. Energy fell 2.4% on the month and 25.6% on the year, while intermediate goods fell 0.4% and 5.0% respectively.

Durables rose 2.4% on the year, capital goods 2.8% and non-durables 3.0%. The ex-energy total fell only 0.2% and 0.6%, so energy drove the headline. Biggest fall: Ireland 12.0%; Greece rose 1.0%.

1. Price relative: Each current-month price is divided by its base-year average and scaled to 100 (base 2021 = 100). The chained (annually linked) form uses the previous December price. Example: 14.60 / 13.80 = 105.8 and 22.00 / 20.00 = 110.0.
2. Elementary index: One group's relatives combine as a geometric mean, the n-th root of their product. Example: 105.8 and 110.0 give a geometric mean of 107.9. A temporarily missing price takes the average move of the rest, never the old carried-forward price.
3. Higher aggregation: Elementary indices combine as a weighted Laspeyres-type average into the overall index. Weights sum to 1, updated periodically from 2021 data. Example: 107.9 x 0.6 plus 102.0 x 0.4 gives 105.5.
4. European aggregation: National indices combine by Member State turnover share; an EU total needs at least 60% weight coverage.
5. Percentage change: MoM = (It / It-1 - 1) x 100 and YoY = (It / It-12 - 1) x 100. Both use non-adjusted data: no seasonal or calendar adjustment. Example: 105.5 / 104.0 is +1.4% on the month; 105.5 / 100.5 is +5.0% on the year.