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RECENT DEVELOPMENTS IN PRODUCER AND INTERNATIONAL TRADE PRICE INDEXES
DEVELOPMENT OF ECONOMY-WIDE PRICE INDEXES
As part of a long-term development program to extend the measures available to support the study of inflation, the ABS has developed two new economy-wide price index measures. The basis for these developments is the statistical framework discussed in Information Paper: An Analytical Framework for Price Indexes in Australia (6421.0). The new measures cover prices of both goods and services, and are released on a quarterly basis. Separate price measures are being developed to record price changes from the perspectives of producers and purchasers.
The first results from this program were published in March 1999 as experimental indexes in Information Paper: Producer Price Index Developments (6422.0). The Stage of Production indexes discussed in that paper have been further developed after consultation with users, and are now being released on a regular quarterly basis (see the section Stage of Production producer price indexes).
A further measure entitled the Price Index of Domestic Final Purchases has also been developed. The concepts underlying this measure are discussed in Information Paper: Price Index of Domestic Final Purchases, Australia, 2001 (6428.0). Publication of this new index is due to commence in early 2002.
Annual reweighting of international trade price indexes
Following the 2000 review of the Import and Export Price Indexes (see Information Paper: Review of the Import Price Index and Export Price Index (6424.0)) the ABS decided to introduce the practice of annually updating the weighting patterns of these two indexes. The first of these annual reweights will occur in respect of the September quarter 2001.
The annual reweighting of the indexes will allow them to reflect shifts in the composition of imports and exports on a timely basis, and thereby to minimise 'item substitution' bias.
Rationalisation of publications
Historically, the approach to publishing the producer and international trade price indexes was highly fragmented, with each of the partial indicators being released in a separate quarterly publication. With the development in recent years of publications for service industry indexes and the stage of production (SOP) indexes, this resulted in ten quarterly titles. This large range of publications made it difficult for users to analyse the data produced and to place them within a broader framework.
To resolve these problems, a rationalisation of the PPI publications was undertaken in 2001. The previous ten quarterly titles were integrated into two ongoing quarterly publications, commencing in the June quarter 2001. One publication (International Trade Price Indexes, Australia (6457.0)) contains the international trade price indexes, while the other (Producer Price Indexes, Australia (6427.0)) contains the remaining producer price indexes, focusing on the economy-wide SOP indexes as the headline indicator.
The ABS has continued work on developing price indexes for service industries and for the output of the construction industry. Publication of price indexes for the output of the building construction industry commenced with the June quarter 2001.
Indexes are published for articles produced by the Manufacturing Industry as a whole and for each of 15 separate Manufacturing sectors (defined in terms of ANZSIC subdivisions or ANZSIC groups).