PPI Input MoM

PPI Input MoM tracks the month-on-month change in the input Producer Price Index (GHIP, all materials and fuels purchased). It covers imports and domestic buys, with daily fuels, from makers in SIC 08 to 33. It uses 2015 as 100 with history linked back to January 1984.

It is not consumer inflation (CPI) or services prices (SPPI, a quarterly gauge). It is not factory gate prices (output PPI) and it excludes VAT and excise duty. The headline rate also leaves out excise duty on cigarettes, tobacco, alcohol and petroleum products.

Firms report deals priced on or near the 1st, with forms sent first working day and due by the 10th. Mid-month shifts roll into the next index, and results appear 2 to 3 weeks after the measured month at 7:00am UK time. Each bulletin also shows output PPI, import prices (IPI), export prices (EPI) and consumer inflation.

The newest 2 months stay provisional and the newest 12 months stay open to revision as late replies arrive. Each issue publishes weighted response rates at first release. A positive reading means prices rose, a negative one means they fell, with no stated target band.

Moves come from 10 product groups with weights refreshed yearly. Imports form about a fifth and shift with the pound (sterling effective exchange rate).

• Other parts and equipment, 24.1%: parts and equipment for production and daily operation.
• Metals and non-metallic mineral products, 20.6%: iron, steel, ferro-alloys and precious metals like silver, gold and platinum.
• Chemicals, 17.2%: basic organic and inorganic chemical inputs.
• Food, domestic, 13.1%: home-produced cereals, livestock, dairy and milk.
• Other produced material, 9.8%: other made inputs, with refined petroleum moving monthly swings.
• Crude energy and residual inputs, 15.2%: crude oil, gas, ores, fuel, imported food, drinks and tobacco.

The bulletin released August 17, 2022 showed July 2022 input prices up 22.6% on the year after a record 24.1% in June 2022. The yearly rate stayed positive for 20 straight months, while monthly growth was 0.1% (index 152.0 against 151.9 in June 2022).

That pace slowed for a 4th straight month after a record 5.0% in March 2022. Crude fell 4.8% on the month while the headline stayed positive, though it still rose 79.6% on the year. Crude cut 0.85 points, the largest drag, while metals added 4.73 points and crude added 4.59 points. Factory gate prices rose 17.1%, top since August 1977, showing delayed pass-through at a lower rate.

1. Collect comparable quotes: firms quote a fixed basket each cycle in the monthly producer prices survey (Monthly Survey for Index Numbers of Producer Prices). Only pure shifts count when specs change, and replies are statutory under the 1947 trade statistics law (Statistics of Trade Act 1947).
2. Strip taxes: all gauges exclude VAT and the headline also excludes excise duty, with duty-paid variants apart.
3. Weight by sales: each item takes its share of domestic maker sales minus export sales. Sales come mainly from the annual production survey (Annual ProdCom), plus energy, steel, food and trade data.
4. Price-uprate weights: older sales scale to base-year values with a matching gauge at fine industry detail.
5. Link and average: an annually chain-linked Laspeyres index sums weights times price relatives against the base. Each base year starts a new series, joined into one line so a new base enters yearly.
6. Work rates, not adjusted: tables are not seasonally adjusted. The monthly rate is this index over the last one and the yearly rate is over the same month, times 100. As a guide, (152.0/151.9 minus 1) times 100 is 0.066%, shown as 0.1%, while 152.0 over 124.0 in July 2021 gives 22.6%.
7. Add effects and check: each effect is about its weight times its price shift, though rounding breaks exact sums. Odd moves above set limits are checked with the maker before use.