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1360.0 - Measuring Australia's Economy, 2003  
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Contents >> Section 6. Prices and Income >> Producer Price Indexes

The producer price index for final commodities recorded a 8.7% increase between September quarter 1998 (the start of the stage of production series) and the June quarter 2002. Prior to September quarter 1998 the articles produced by manufacturing industries index was the headline producer price index indicator.





SELECTED PRODUCER PRICE INDEXES, ALL GROUPS
Period
Stage of production producer price indexes (final commodities) (a)
Price index
of articles produced
by manufacturing industries (b)
Price index
of materials used
in manufacturing industries (b)
Price index
for output of the general construction industry (a)
Price index of materials used in house building (b)

Price index of materials used in building (other
than house
building) (b)
Price index for output of the transport
(freight) & storage
industries (a)
Price index for output of the property & business services industries (a)

ANNUAL AVERAGE
1998–99
100.0
115.6
105.9
100.0
119.5
115.2
100.0
100.0
1999–00
102.6
120.6
115.8
104.9
122.8
116.1
100.2
103.6
2000-01
107.0
128.5
132.4
106.1
124.4
116.4
102.3
107.5
2001-02
108.8
128.8
132.4
107.9
126.0
118.6
103.2
110.6

QUARTERLY
1999-00
June
104.9
123.8
123.5
106.4
125.5
117.4
101.2
104.7
2000–01
September
105.4
126.2
127.8
106.2
124.5
115.5
101.2
106.0
December
107.0
129.3
133.9
106.3
124.4
116.3
102.1
107.3
March
106.9
127.7
130.3
106.2
124.2
116.7
102.8
108.2
June
108.5
130.7
137.7
105.8
124.4
117.2
103.2
108.6
2001–02
September
108.2
129.2
134.5
106.7
124.7
117.5
103.2
109.7
December
108.8
128.4
132.0
107.3
125.2
118.1
103.3
110.3
March
109.0
128.3
130.6
108.2
126.1
118.4
103.0
110.9
June
109.2
129.3
132.6
109.5
127.8
120.3
103.3
111.4

Source: Producer Price Indexes, Australia (6427.0).
(a) Reference base: 1998-99 = 100.0
(b) Reference base: 1989-90 = 100.0

Explanatory Notes

The producer price indexes measure changes in prices received, or paid, by producers of goods and providers of services. In Australia they generally relate to prices for goods and services as they affect businesses, for example, the price of goods used as inputs to or output from the manufacturing sector, the price of materials used as inputs to the building industry and, more recently, the price of services provided by the property and business services industries, and transport (freight) and storage industries. This contrasts with the CPI which measures changes in the retail prices paid by consumers, as explained earlier in this chapter.

The most comprehensive producer price indexes are the 'stage of production' indexes which show the supply of commodities to the Australian economy categorised according to their role in the production chain. They cover both domestically produced and imported commodities. There are three separate stages of production. Preliminary (Stage 1) commodities are used in the production of intermediate (Stage 2) commodities; in turn intermediate (Stage 2) commodities flow into the production of final (Stage 3) commodities. This framework allows for analyses of price changes as commodities flow through the production process. Price changes for earlier stages of production may be indicators of possible future price changes for later stages. Only the price index for final (Stage 3) commodities is presented in the above table.

Sectoral indexes are available for four broad sectors of the Australian economy: service industries, construction industry, manufacturing industry and the coal mining industry. The producer price indexes measure changes in prices of materials used in the production processes for the manufacturing, construction and coal mining industries, as well as output prices for the construction, manufacturing, transport (freight) & storage and property and business services industries. As far as possible the prices collected are actual transaction prices, including the effects of all forms of discounting.

The indexes are used by both the public and private sectors for economic analysis and for adjusting prices in business contracts. The indexes are also used as input into the compilation of other ABS statistics, such as volume estimates in the national accounts.


Further Reading

Producer Price Indexes, Australia (6427.0)
This publication contains a range of producer price indexes. Economy-wide indexes are presented within a stage of production framework, followed by a set of indexes relating to specific industries (selected manufacturing, construction, mining and service industries).

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