PPI Core Output YoY

PPI Core Output YoY (Producer Price Index, a gauge of selling prices) measures yearly change in UK factory gate prices. Factory gate means the amount UK manufacturers receive for goods sold at home, excluding VAT and excise duty. Core, a market shorthand the publisher ONS (Office for National Statistics, the UK statistics agency) does not use, excludes food, beverages, tobacco and petroleum.

The headline series covers all product groups, while core leaves out food and fuel swings. It covers goods from UK manufacturers only, not services, exports, input costs or consumer prices paid by households.

Manufacturers report prices for transactions on or near the 1st, within 10 days, while mid-month changes enter the next index. ONS publishes the monthly bulletin about 2 to 3 weeks after the reference month at 7:00am, with dates announced in advance. Schedule changes are announced publicly with reasons, and corrections appear as notices with datasets updated. Each release brings time series, group contributions, detailed datasets and response rates, alongside monthly CPIH, RPI and house prices and quarterly SPPI.

Core output moves with its remaining product groups, since food and petroleum swings are removed.

• Chemical and pharmaceutical: prices for chemicals and medicines sold for domestic use.
• Metals, machinery and equipment: prices for metals and industrial machinery sold at home.
• Computer, electrical and optical: prices for computers, electrical gear and optical goods.
• Transport equipment: prices for vehicles and other transport goods sold domestically.
• Clothing, textile, leather, paper and printing: prices for clothing, fabrics, leather, paper and printed products.
• Other manufactured products: prices for remaining factory goods not grouped elsewhere.

The May 2023 release, published 21 June 2023, showed headline output up 2.9% on the year, down from 5.2% in April 2023. Output fell 0.5% on the month, as refined petroleum dropped 30.6% for a 3.42 point drag. Food rose 11.5% and added 2.60 points, while other manufactured products added 1.74 points.

Core output stood at 134.7 points, down 0.3% on the month and up 4.1% on the year. The headline stood at 135.5 points with 2.9% yearly growth, so core ran 1.2 points higher. Falling petroleum pulled the headline below core, and April and May 2023 figures were provisional at publication.

1. Collect prices: statutory monthly survey records transactions on or near the 1st, plus administrative data compiled the same way. Only pure price change enters, with quality shifts removed.
2. Build weights: weights come from makers' domestic sales after removing exports, mostly the ProdCom sales survey. Weights update yearly from turnover data under annual chain-linking.
3. Price-uprate: stale sales are price-uprated to the base year using a matching price index at fine product detail.
4. Laspeyres average and chain-link: each month's index multiplies base-period sales shares by price relatives (current price over base price). For example, sales of 700 and 300 give weights 0.70 and 0.30. Relatives of 1.05 and 0.90 give 0.70 x 105 + 0.30 x 90 = 100.5 on a 2015 = 100 base. Each yearly series is scaled onto the prior one through a link factor.
5. Publish and validate: monthly and 12-month rates come from index levels, with contributions reflecting weight and inflation. Large moves are checked with respondents, since thresholds vary by product group. Contributions may not sum exactly because of rounding, and figures are not seasonally adjusted.