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6427.0.55.005 - Implementation of the Review of the Producer and International Trade Price Indexes , 2012  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 28/09/2012  First Issue
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Contents >> Chapter 5: Re–referencing of the Producer and International Trade Price Indexes





RE-REFERENCING OF PRODUCER AND INTERNATIONAL TRADE PRICE INDEXES


5.1 As mentioned in Chapter 2, from the September quarter 2012, the Australian Bureau of Statistics (ABS) will harmonise the index reference periods for Producer Price Indexes (PPIs) (including Stage of Production (SOP) indexes) and the International Trade Price Indexes (ITPIs). These series will be presented on an index reference period of 2011–12 = 100.0

5.2 Conversion factors will be published as an appendix in the September quarter 2012 issues of the Producer Price Indexes, Australia (cat. no. 6427.0) and the International Trade Price Indexes, Australia ( cat. no, 6457.0). This will enable users to convert previously published time series to the new index reference period or to convert index numbers on the new index reference period to the previous time series index reference period.

5.3 The following examples demonstrate the method used by the ABS to calculate the conversion factors to convert from the old (1998–99 = 100.0) to the new (2011–12 = 100.0) index reference period (and vice versa).


CONVERTING AN OLD TIME SERIES TO THE NEW INDEX REFERENCE PERIOD

5.4 The conversion of time series from the old index reference periods to the new involves a rescaling of the index numbers. The conversion factors that should be applied to the index numbers are calculated by obtaining the ratio of the index numbers on the old (1998–99 = 100.0) to the new index reference period (2011–12 = 100.0).

5.5 Conversion factors are calculated using the four index numbers for the 2011–12 financial year.

5.6 For example, for the Stage of Production Intermediate demand; total an arithmetic conversion factor is obtained as follows:
      • Rounded conversion factor (index reference period 1998–99 = 100.0) = 100.0/((150.2 + 150.7 + 151.1 + 152.2)/4) = 0.6620
      • Index number for June quarter 2012 = 152.2 (index reference period 1998–99 = 100.0)
      • Index number for the June quarter 2012 (index reference period 2011–12 = 100.0) is 152.2 x 0.6620 = 100.8

5.7 The factor may be used to convert any historical Stage of Production Intermediate demand; total, index numbers to the new index reference period. The formulae shown in the above example may be followed in respect of any specific time series for which index numbers have been published on the old index reference period.


CONVERTING THE RE–REFERENCED SERIES BACK TO THE PREVIOUS INDEX REFERENCE PERIOD

5.8 The conversion of the series from the new index reference period to the old involves a rescaling of the index numbers. The rescaling factors are obtained by taking the inverse of the previously described scaling factor.

5.9 For example, for the Stage of Production Intermediate demand; total, the rescaling factor is obtained as follows:
      • Rounded conversion factor (index reference period 1998–99 = 100.0) = ((150.2 + 150.7 + 151.1 + 152.2)/4) /100.0 = 1.5105
      • Index number for the June quarter 2012 (index reference period 2011–12 = 100.0) is 100.8
      • Index number for the June quarter 2012 (index reference period 1998–99 = 100.0) is 100.8 x 1.5105 = 152.2

5.10 The factor may be used to convert any historical Stage of Production Intermediate demand; total index number on the new index reference period. The formulae shown in the above example may be followed in respect of any specific time series for which index numbers have been published on the new index reference period.


ROUNDING

5.11 Index numbers and percentage changes are always published to one decimal place, with the percentage changes being calculated from the rounded index numbers. Index numbers for periods longer than a single quarter (e.g. for financial years) are calculated as the simple arithmetic average of the relevant rounded quarterly index numbers. The conversion factors described above are applied to the rounded index numbers.

5.12 A consequence of re–referencing price indexes can be that period–to–period percentage changes may differ slightly to those previously published due to rounding and the re–referencing. These differences do not constitute a revision.

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