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1301.0 - Year Book Australia, 2012  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 24/05/2012   
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Prices

PRODUCER PRICE INDEXES

Producer price indexes measure changes in the prices either received or paid by producers of goods and providers of services. In Australia, they generally relate to prices for products (goods and services) as they affect businesses, for example, the price of goods used as inputs to manufacturing and the price of services provided by the services industries. This contrasts with the CPI, which measures changes in the retail prices paid by consumers, as explained earlier in this chapter. For more information about producer price indexes, see Producer and International Trade Price Indexes: Concepts, Sources and Methods, 2006 (6429.0).


STAGE OF PRODUCTION INDEXES

The Stage of production (SOP) producer price indexes are compiled using the stage of production concept, in which flows of products are categorised according to their economic destination on a sequential basis along the production chain. The basis for the categorisation of products is the 1996–97 Australian Input-Output (I–O) tables (for more information, see chapter 30 NATIONAL ACCOUNTS). The principal categorisation is between final products (those destined for final consumption, capital formation or export) and products that will be processed further (referred to as 'non-final' products).

The initial breakdown of product flows into ‘final’ and ‘non-final’ represents a useful economic dissection of producers' transactions. However, the non-final products can flow into the production of either final products or other non-final products. Therefore, to aid analysis, the non-final product flows have been divided on a sequential basis between stage 1 (or preliminary) products and stage 2 (or intermediate) products. This approach results in three separate stages of production.

In order to avoid multiple counting of transactions, the three stages are not aggregated.

Under this framework, preliminary (stage 1) products are used in the production of intermediate (stage 2) products which, in turn, flow into the production of final (stage 3) products.

The framework allows for analyses of price change as products flow through production processes. Price changes for earlier stages of production may be indicators of possible future price changes for later stages.

The same product can be assigned to any of the stages of production depending on its destination. For example, bauxite is a preliminary (stage 1) product when it is used to produce alumina that is used in the production of aluminium by an Australian producer. Where the alumina is exported, the bauxite used in its production will be considered an intermediate (stage 2) product. Where the bauxite is exported, it is deemed to be a final (stage 3) product.


Market transactions approach

The ABS has adopted a market transactions approach in disaggregating product supply into the various production stages. Under this approach, the individual transactions in a given product are assigned to the relevant stage, based on identification of the market(s) in which that product is transacted. This is determined by the usage pattern of that product. A particular product within the index classification system can be assigned to more than one stage of production, on the basis of its usage pattern as identified in the I-O tables.


Index coverage

The SOP indexes are compiled on the basis of the Australian and New Zealand Standard Industrial Classification (ANZSIC), 1993 edition. In concept, the scope of the SOP indexes is economy-wide, relating to the selected output of all the goods and services industries. However, there are limits on the availability of price indexes for service industries, and coverage is currently restricted to the selected output of the Accommodation, Transport (freight) and storage, and Property and business services industries. Similarly, coverage of the Construction industry is confined to indexes for the output of the following industries: House construction, Residential building construction n.e.c., Non-residential building construction, and Road and bridge construction. Coverage of the stage of production indexes will be extended as additional service and construction industry collections are established. Table 29.15 shows Stage of production producer price indexes.

29.15 STAGE OF PRODUCTION PRODUCER PRICE INDEXES(a), By stage and source

Preliminary
Intermediate
Final (excl. exports)

Domestic
Imports
Total
Domestic
Imports
Total
Domestic
Imports
Total

INDEX NUMBER

2006–07
137.0
132.4
136.2
133.9
114.5
131.0
134.8
82.5
124.2
2007–08
144.5
141.9
144.0
141.3
117.4
137.8
141.6
78.8
128.7
2008–09
153.8
154.6
153.7
147.9
130.9
145.4
146.3
88.9
134.5
2009–10
148.8
134.6
146.7
144.9
115.9
140.6
147.9
82.0
134.4
2010–11
156.0
140.4
153.7
151.0
117.7
146.1
153.4
79.0
138.2

CHANGE FROM PREVIOUS FINANCIAL YEAR (%)

2006–07
5.8
2.2
5.3
5.7
1.7
5.1
4.1
–2.4
3.2
2007–08
5.5
7.2
5.7
5.5
2.5
5.2
5.0
–4.5
3.6
2008–09
6.4
8.9
6.7
4.7
11.5
5.5
3.3
12.8
4.5
2009–10
–3.3
–12.9
–4.6
–2.0
–11.5
–3.3
1.1
–7.8
–0.1
2010–11
4.8
4.3
4.8
4.2
1.6
3.9
3.7
–3.7
2.8

(a) Reference base period is 1998–99 = 100.0.
Source: Producer Price Indexes, Australia (6427.0).


MANUFACTURING INDUSTRIES INDEXES

The Manufacturing output producer price indexes relate to selected products (i.e. articles produced) primary to the Manufacturing industry, while the Manufacturing input producer price indexes relate to materials used by establishments classified to the Manufacturing industry. These indexes are compiled on the basis of the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition.


Gross sector basis

Prior to the September quarter 2009, the manufacturing indexes were constructed on a net sector basis with intra-sector transactions netted out. The scope of the output indexes was therefore restricted to transactions in products primary to the defined sector of the Australian Manufacturing industry that were sold or transferred to domestic establishments outside that sector, or used as capital equipment, or exported. The scope of the input indexes related to transactions in materials used in defined sectors of the Australian Manufacturing industry that were produced by domestic establishments outside that sector, or imported.

From the September quarter 2009, the manufacturing indexes have been constructed on a gross sector basis. The scope of the output indexes includes transactions in products primary to the defined sector of Australian manufacturing industries that are sold or transferred to domestic establishments within or outside that sector for further processing, or used as capital equipment, or exported. The indexes relate to all products primary to the Manufacturing industry, excluding commission production products and general government consumption of fixed capital. The scope of the input indexes relates to transactions in materials used by establishments classified to the Manufacturing industry. Materials are defined as products primary to ANZSIC 2006 Divisions A to D (Agriculture, forestry and fishing; Mining; Manufacturing; and Electricity, gas, water and waste services) that are consumed by establishments classified to the Manufacturing industry.

Price indexes of articles produced by manufacturing industries

From the September quarter 2009 onwards, the Manufacturing division output index measures changes in prices of products (articles) that are primary to ANZSIC 2006 Division C Manufacturing, that are sold or transferred to domestic establishments within or outside the Manufacturing division for further processing, intermediate use or used as capital equipment or exported.

The price index of produced articles primary to the Manufacturing industry, as measured by the Manufacturing division output index, rose 7.4% between 2006–07 and 2010–11 (table 29.16).

The output indexes for products primary to Manufacturing industry subdivisions measure transactions within and outside the industry subdivision or group. Prior to the September quarter 2009, these series were constructed on a net sector basis, that is, they excluded intermediate transactions in products primary to the specific manufacturing subdivision or group that were sold or transferred within that subdivision or group for further processing.

29.16 PRICE INDEXES OF ARTICLES PRODUCED BY MANUFACTURING INDUSTRIES(a)(b)

INDEX NUMBER

2006–07
156.4
2007–08
164.2
2008–09
168.0
2009–10
162.8
2010–11
168.0

CHANGE FROM PREVIOUS FINANCIAL YEAR (%)

2006–07
4.7
2007–08
5.0
2008–09
2.3
2009–10
–3.1
2010–11
3.2

(a) Reference base period is 1989–90 = 100.0.
(b) Classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition (1292.0).
Source: Producer Price Indexes, Australia (6427.0).


Between 2009–10 and 2010–11, the largest rise in the price of products primary to the Manufacturing division was in Petroleum and coal product manufacturing at 10.5%, while Printing (including the reproduction of recorded media) fell 7.9% (table 29.17).

29.17 PRICE INDEXES OF ARTICLES PRODUCED BY MANUFACTURING INDUSTRIES(a)

2006–07
2009–10
2010–11
Change from 2006–07 to 2010–11
Change from 2009–10 to 2010–11
ANZSIC Subdivision(b)
index no.
index no.
index no.
%
%

Food product manufacturing(c)
108.6
124.0
126.6
16.6
2.1
Beverage and tobacco product manufacturing(c)
116.5
131.3
142.4
22.2
8.5
Textile, leather, clothing and footwear manufacturing(c)
104.5
112.7
113.7
8.8
0.9
Wood product manufacturing
148.2
169.7
173.4
17.0
2.2
Pulp, paper and converted paper product manufacturing
120.2
128.3
130.5
8.6
1.7
Printing (including the reproduction of recorded media)(c)
91.4
90.3
83.2
–9.0
–7.9
Petroleum and coal product manufacturing
295.6
291.7
322.2
9.0
10.5
Basic chemical and chemical product manufacturing
127.6
138.4
139.8
9.6
1.0
Polymer product and rubber product manufacturing
140.6
150.1
152.8
8.7
1.8
Non-metallic mineral product manufacturing
136.7
152.9
156.7
14.6
2.5
Primary metal and metal product manufacturing
189.8
153.6
166.8
–12.1
8.6
Fabricated metal product manufacturing
145.3
168.7
166.9
14.9
–1.1
Transport equipment manufacturing
129.2
130.7
129.7
0.4
–0.8
Machinery and equipment manufacturing
122.7
129.0
127.8
4.2
–0.9
Furniture and other manufacturing
143.4
155.5
157.8
10.0
1.5

(a) Reference base period is 1989–90=100.0 unless otherwise specified.
(b) Classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition (1292.0).
(c) Reference base period is 2001–02 = 100.0.
Source: Producer Price Indexes, Australia (6427.0).


Price indexes of materials used in manufacturing industries

The Manufacturing division input index (table 29.18), from the September quarter 2009 onwards, measures changes in prices of materials used in ANZSIC 2006 Division C Manufacturing, that have been purchased or transferred in from domestic establishments within or outside the Manufacturing division, or imported. Prior to the September quarter 2009, this index was constructed on a net sector basis.

The price index of materials used in manufacturing, as measured by the Manufacturing division input index, rose 11.7% between 2006–07 and 2010–11, driven mainly by increases in the price of imported materials. In 2010–11, the price of imported materials was 13.6% higher than the price in 2006–07, while the price of domestic materials had risen 8.1% (table 29.18).

The input indexes for materials used in manufacturing measure input purchases or transfers within and outside the subdivision. Prior to the September quarter 2009, they were constructed on a net sector basis, that is, they excluded intermediate transactions in materials used in a specific manufacturing subdivision or group that were sold or transferred within that subdivision or group for further processing.

29.18 PRICE INDEXES OF MATERIALS USED IN MANUFACTURING INDUSTRIES(a)(b)

Domestic
Imported
Total

INDEX NUMBER

2006–07
183.2
132.0
162.2
2007–08
205.4
133.3
177.1
2008–09
208.3
154.1
187.8
2009–10
185.8
142.9
169.8
2010–11
198.1
150.0
181.2

CHANGE FROM PREVIOUS FINANCIAL YEAR (%)

2006–07
6.3
3.8
5.0
2007–08
12.1
1.0
9.2
2008–09
1.4
15.6
6.0
2009–10
–10.8
–7.3
–9.6
2010–11
6.6
5.0
6.7

(a) Reference base period is 1989–90 = 100.0.
(b) Classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition (1292.0).
Source: Producer Price Indexes, Australia (6427.0).


From 200910 to 201011, the price of materials used in manufacturing, as measured by the Manufacturing division input index, rose 6.7%. Rises occurred for the materials used in the majority of manufacturing industries. The largest increases in price were for Primary metal and metal product manufacturing (12.6%) and Petroleum and coal product manufacturing (10.7%) (table 29.19).


29.19 PRICE INDEXES OF MATERIALS USED IN MANUFACTURING INDUSTRIES(a)

2006–07
2009–10
2010–11
Change from 2006–07 to 2010–11
Change from 2009–10 to 2010–11
ANZSIC Subdivision(b)
index no.
index no.
index no.
%
%

Food product manufacturing(c)
109.8
117.5
126.2
14.9
7.4
Beverage and tobacco product manufacturing(c)
87.3
95.3
95.1
8.9
–0.2
Textile, leather, clothing and footwear manufacturing(c)
96.6
95.6
103.5
7.1
8.3
Wood product manufacturing
135.3
148.0
148.4
9.7
0.3
Pulp, paper and converted paper product manufacturing
110.8
109.0
109.8
–0.9
0.7
Printing (including the reproduction of recorded media)(c)
95.2
99.5
98.4
3.4
–1.1
Petroleum and coal product manufacturing
294.7
306.1
339.0
15.0
10.7
Basic chemical and chemical product manufacturing
136.7
140.6
141.7
3.7
0.8
Polymer product and rubber product manufacturing
147.7
142.4
145.5
–1.5
2.2
Non-metallic mineral product manufacturing
142.8
161.9
167.5
17.3
3.5
Primary metal and metal product manufacturing
175.3
213.5
240.3
37.1
12.6
Fabricated metal product manufacturing
156.8
143.6
140.9
–10.1
–1.9
Transport equipment manufacturing
138.5
142.4
140.8
1.7
–1.1
Machinery and equipment manufacturing
138.2
131.0
132.1
–4.4
0.8
Furniture and other manufacturing
149.1
158.0
163.3
9.5
3.4

(a) Reference base period is 1989–90 = 100.0 unless otherwise specified.
(b) Classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition (1292.0).
(c) Reference base period is 2001–02 = 100.0.
Source: Producer Price Indexes, Australia (6427.0).


CONSTRUCTION INDUSTRIES INDEXES

Price index of the outputs primary to the Building construction Subdivision and selected Construction industry classes

The Construction output producer price indexes measure changes in prices of the outputs primary to selected ANZSIC 2006 classes in Division E Construction. Table 29.20 shows price indexes for outputs primary to Subdivision 30 Building construction, its three classes and the class Road and bridge construction.

29.20 PRICE INDEXES OF SELECTED OUTPUTS OF THE CONSTRUCTION INDUSTRY(a)

ANZSIC Subdivision and Class(b)
2006–07
2007–08
2008–09
2009–10
2010–11

INDEX NUMBER

Building construction
142.5
150.4
155.0
154.5
158.5
House construction
139.7
146.8
152.3
157.0
161.2
Other residential building construction
144.8
152.3
155.7
150.0
153.2
Non-residential building construction
146.2
155.4
159.0
153.4
157.4
Road and bridge construction
139.9
147.5
157.0
159.1
163.9

CHANGE FROM PREVIOUS FINANCIAL YEAR (%)

Building construction
4.2
5.5
3.1
–0.3
2.6
House construction
2.6
5.1
3.7
3.1
2.7
Other residential building construction
4.4
5.2
2.2
–3.7
2.1
Non-residential building construction
5.8
6.3
2.3
–3.5
2.6
Road and bridge construction
5.0
5.4
6.4
1.3
3.0

(a) Reference base period is 1998–99 = 100.0.
(b) Classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition (1292.0).
Source: Producer Price Indexes, Australia (6427.0).


Price index of materials used in house building

The Construction input producer price indexes measure changes in prices of materials used in house building (table 29.21). This table relates to the statistical division for each state capital city and the weighted average of the six capital cities. The ANZSIC 2006 Class House construction (3011) approximates the industry scope of the indexes.


29.21 PRICE INDEXES OF MATERIALS USED IN HOUSE BUILDING(a)(b)

Sydney
Melbourne
Brisbane
Adelaide
Perth
Hobart
Weighted average of six capital cities

INDEX NUMBER

2006–07
153.3
141.7
145.3
149.9
144.0
156.2
147.0
2007–08
157.1
146.1
151.4
153.9
150.7
163.7
152.1
2008–09
166.0
154.7
160.6
168.8
163.0
175.0
162.0
2009–10
167.8
156.7
161.6
169.1
164.5
179.0
163.6
2010–11
172.2
159.6
165.9
173.2
167.0
183.1
167.1

CHANGE FROM PREVIOUS FINANCIAL YEAR (%)

2006–07
2.5
3.4
3.2
2.8
5.9
3.4
3.5
2007–08
2.5
3.1
4.2
2.7
4.7
4.8
3.5
2008–09
5.7
5.9
6.1
9.7
8.2
6.9
6.5
2009–10
1.1
1.3
0.6
0.2
0.9
2.3
1.0
2010–11
2.6
1.9
2.7
2.4
1.5
2.3
2.1

(a) Reference base period is 1989–90 = 100.0.
(b) The separate city indexes measure price movement within each city individually. They do not compare price levels between cities.
Source: Producer Price Indexes, Australia (6427.0).


SERVICE INDUSTRIES INDEXES

The currently available Service industry producer price indexes represent the results to date of a program to progressively extend the scope of Producer price indexes into the service industries of the economy. These indexes are important sources of data for the Stage of production indexes. The Service industry indexes measure changes in prices of services primarily defined to selected ANZSIC 2006 industries, excluding general government consumption of fixed capital (table 29.22).

New index series created as part of the implementation of ANZSIC 2006 in the September quarter 2009 have been backcast to the September quarter 2001. These index numbers are calculated on the reference base period 2001–02 = 100.0. Continuing index number series are calculated on the reference base period 1998–99 = 100.0. Table 29.22 presents price indexes for selected output of services primary to the following ANZSIC 2006 divisions: Transport, postal and warehousing (Division I); Information media and telecommunications (Division J); Rental, hiring and real estate services (Division L); Professional, scientific and technical services (Division M); Administrative and support services (Division N); Public administration and safety (Division O) and Other services (Division S).


29.22 PRICE INDEXES OF SELECTED OUTPUT OF SERVICE INDUSTRIES(a)


ANZSIC(b)
2006–07
2009–10
2010–11
Change from 2006–07 to 2010–11
Change from 2009–10 to 2010–11
index no.
index no.
index no.
%
%

Transport, postal and warehousing (Division I)
Road freight transport
126.9
140.4
146.2
15.2
4.1
Rail freight transport
100.1
120.0
127.0
26.9
5.8
Water freight transport
110.6
109.4
107.2
-3.1
-2.0
Pipeline transport
107.7
130.5
136.2
26.5
4.4
Postal and courier pick-up and delivery services(c)
110.4
117.9
124.2
12.5
5.3
Water transport support services
107.9
122.0
129.9
20.4
6.5
Airport operations and other air transport support services
99.8
104.5
105.2
5.4
0.7
Customs agency services
110.4
115.4
117.1
6.1
1.5
Warehousing and storage services
118.2
135.6
141.2
19.5
4.1
Information media and telecommunications (Division J)
Newspaper, periodical, book and directory publishing(c)
115.1
120.7
122.1
6.1
1.2
Data processing, web hosting and electronic information storage services(c)
106.4
105.4
107.0
0.6
1.5
Rental, hiring and real estate services (Division L)
Rental and hiring services (except real estate)
112.7
118.4
121.4
7.7
2.5
Non-residential property operators
131.8
143.1
145.1
10.1
1.4
Real estate services
213.0
252.0
269.9
26.7
7.1
Professional, scientific and technical services (Division M)
Scientific research services
129.5
144.5
146.5
13.1
1.4
Architectural, engineering and technical services(c)
130.8
152.4
154.1
17.8
1.1
Legal and accounting services
143.2
156.2
160.7
12.2
2.9
Market research and statistical services(c)
123.5
138.1
143.3
16.0
3.8
Management advice and related consulting services(c)
110.7
116.8
119.8
8.2
2.6
Computer system design and related services(c)
112.2
111.5
112.9
0.6
1.3
Administrative and support services (Division N)
Employment services(c)
128.4
140.0
145.5
13.3
3.9
Other administrative services(c)
116.6
127.6
129.1
10.7
1.2
Building cleaning, pest control and gardening services(c)
115.3
123.7
128.7
11.6
4.0
Public administration and safety (Division O)
Investigation and security services
121.8
127.3
130.6
7.2
2.6
Other Services (Division S)
Parking services
170.1
225.2
264.6
55.6
17.5

(a) Reference base period is 1998–99 = 100.0 unless otherwise specified.
(b) Classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition (1292.0).
(c) Reference base period is 2001–02 = 100.0.
Source: Producer Price Indexes, Australia (6427.0).

 

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Statistics contained in the Year Book are the most recent available at the time of preparation. In many cases, the ABS website and the websites of other organisations provide access to more recent data. Each Year Book table or graph and the bibliography at the end of each chapter provides hyperlinks to the most up to date data release where available.


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