Producer Price Index YoY

The (industrial) Producer Price Index (PPI), also called the output price index, measures price change from the seller perspective. It tracks ex-works (factory-gate) prices for goods sold on the domestic market in national currency, excluding imports. It covers NACE (EU activity classification) sections B (mining), C (manufacturing), D (energy supply) plus E36 (water supply), measured for kind-of-activity units (KAU). It is a Principal European Economic Indicator under Short-term business statistics for monetary policy, excluding consumer prices (separate HICP), exports and services.

Eurostat, the statistical office of the European Union, publishes it monthly at 11:00 CET/CEST on dates fixed before the year begins. Member States must transmit data within 1 month of the reference month, so the release follows about 5 weeks later. Each release shows euro area and EU month-on-month and year-on-year rates, MIG (Main Industrial Groupings) splits, country tables and index levels (2021 = 100). Aggregates are revised monthly from country revisions, errors fixed at once, major changes pre-announced, with quarterly data kept consistent.

The headline follows 5 industrial groups plus an ex-energy memo aggregate.

• Energy: output prices of energy-producing industrial activities, the main headline driver.
• Intermediate goods: prices of goods used as inputs for further production.
• Capital goods: prices of machinery and equipment used for production.
• Durable consumer goods: prices of longer-lived household goods.
• Non-durable consumer goods: prices of short-lived household goods such as food-linked items and consumables.
• Total industry excluding energy: memo aggregate showing factory-gate pressure without energy.

In August 2022 the EU rose 4.9% month-on-month and 43.0% year-on-year, with the euro area at 5.0% and 43.3% (published 4 October 2022). Energy drove it, up 11.9% on the month and 115.4% on the year, while industry excluding energy rose only 0.3% and 15.1%. Other EU gains on the year were smaller: intermediate goods 20.1%, non-durable consumer goods 15.6%, durable goods 10.2% and capital goods 8.1%. The lesson is headline energy dominance, though Ireland rose 28.4% on the month; the July 2022 annual rate was revised only from 37.8% to 37.9%.

1. Basic price: Basic means excluding VAT (value-added tax) and duties, adding subsidies, with quantity, transport, rebates, services, guarantees and destination fixed.
2. Order moment: Prices refer to orders booked in the period, not to goods leaving the factory.
3. National indices: Each national index is a weighted average of product price relatives with Laspeyres-type fixed weights; collection methods differ by country.
4. EU aggregation: The EU index sums each country index times its weight, with weights from business statistics for base year 2021, recalculating history on update. For example, 0.6 x 112.0 plus 0.4 x 118.0 equals 114.4.
5. Coverage gates: A European total needs 60% weight coverage, and a missing higher total is estimated only with 80% lower coverage, marked "i".
6. No adjustment: Prices publish only unadjusted, as working days do not affect them, so month and year changes use the unadjusted index (2021 = 100).
7. Rate formulas: Month change is (I(t)/I(t-1) minus 1) x 100 and year change is (I(t)/I(t-12) minus 1) x 100, where I is the index. If the EU index is 114.4 versus 100.0 a year earlier, year change is (114.4/100.0 minus 1) x 100 = 14.4%.