PPI Core Output MoM

Core output PPI measures monthly change in factory gate prices, the prices UK manufacturers charge domestic buyers, excluding food, beverages, tobacco and petroleum. It covers manufactured goods only, not services, imports, exports or consumer prices.

The Office for National Statistics (ONS) compiles it as official statistics from a statutory monthly survey plus administrative data. 'Core' is a vendor shorthand ONS itself does not use in its releases. A positive rate means prices rose, while a negative rate means they fell.

Businesses report prices for transactions on or near the first of each month, while later price changes enter the next index. Replies carry a 10-day deadline. The Office for National Statistics (ONS) publishes the bulletin 2 to 3 weeks after the reference month at 7am UK time.

The latest 2 months stay provisional, while the latest 12 can be revised as late data arrive. It appears in the same monthly batch as CPIH, RPI and the UK House Price Index. The quarterly SPPI is published alongside them, with dates announced in advance on the ONS calendar. The series carries no target, threshold or neutral level.

Core output PPI moves with the remaining manufactured goods after food, beverages, tobacco and petroleum are removed. The weights below show each group's share and what it covers.

• Food products, at 26.9%: factory-gate food prices with dairy and meat, outside core.
• Alcoholic beverages and tobacco products, at 4.3%, and coke and refined petroleum products, at 4.5%: duty-linked goods outside core.
• Basic metals, fabricated metal products and machinery, at 12.9%, and motor vehicles and other transport equipment, at 14.8%: metals and vehicle prices.
• Other outputs from manufacturing, at 21.8%: miscellaneous goods including plastics that react to oil shocks.
• Paper, paper products and printed material, at 5.6%, and chemicals and pharmaceutical preparations, at 4.9%: paper, print, chemical and medicine prices.
• Textiles, wearing apparel and leather products, at 1.1%, and computer, electronic and electrical products, at 3.2%: textile, leather, computer and electrical prices.

In the October 2023 bulletin, released 15 November 2023, output prices fell 0.6% on the year after a revised 0.2% rise in September. They rose 0.1% on the month. Input prices fell 2.6% on the year but rose 0.4% on the month.

Fuel inputs and food outputs gave the largest downward pushes to the change in annual rates. Levels stayed far above 2021 values because the year-ago base was also high.

1. Collect prices: surveyed businesses report transaction prices from on or near the first of each month, plus administrative prices compiled the same way. Specification and quality changes are masked out, so the index shows price change only.
2. Weight by domestic sales: each item takes a weight, its share of domestic-market sales, with exports removed from total sales. Sales come mainly from the ProdCom survey, minus estimated exports.
3. Average with a Laspeyres index: the index averages price changes against the base year by sales shares in that year. For example, three items with weights 50%, 30% and 20% and price relatives 1.04, 1.02 and 0.99 give 102.4. If the prior month was 101.9, MoM is about 0.5%. The first item (4% on 50%) adds 2.0 points while the second (2% on 30%) adds 0.6 points, so rate times weight decides.
4. Chain-link each December: a separate series runs under each base year. It then resets in December by a link factor that removes the gap, and factors build up yearly.
5. Aggregate and derive rates: items group under CPA 2.1 on a gross basis that includes sales between manufacturers, excluding VAT and duties. MoM compares the index with the prior month and YoY with the same month a year earlier. Components add rate times weight, and the index uses 2015 as 100 with no seasonal adjustment.