Producer Price Indexes, Australia

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Contains a range of producer price indexes in the Australian economy, comprising mining, manufacturing, construction and services industries.

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Reference period
March 2024
Released
26/04/2024
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    Producer Price Indexes, Australia, June Quarter 2024
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    Producer Price Indexes, Australia, September 2024
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    Producer Price Indexes, Australia, December 2024
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Key statistics

Final demand (excluding exports)

  • Rose 0.9% this quarter.
  • Rose 4.3% over the past twelve months.

What are the Producer Price Indexes (PPIs)?

The Australian PPIs measure the price change of products (goods and services) as they leave the place of production or as they enter the production process. This price change is measured from the perspective of the industries that produce goods and services. Whereas other measures, such as the Consumer Price Index (CPI), measure price change from the consumers perspective.

What is Final demand?

Final demand measures the price change of products (goods and services) consumed with no further processing. For example, sugar cane is a preliminary product and used as an input into the production of raw sugar. In turn raw sugar is an intermediate product which is then used to produce the final product, refined sugar. Final demand captures final products destined for final consumption, with no further processing.

Illustrated below are two examples for the three stages: preliminary, intermediate, and final for sugar and bread.

Example of Final demand: sugar cane is a preliminary product and used as an input into the production of raw sugar. In turn raw sugar is an intermediate product which is then used to produce the final product, refined sugar. Final Demand captures final products destined for final consumption, with no further processing.
This image illustrates two examples for the three stages: preliminary products, intermediate products, and final products: 1. Sugar cane is a preliminary product and used as an input into the production of raw sugar. In turn raw sugar is an intermediate product which is then used to produce the final product, refined sugar. 2. Wheat is a preliminary product and used as an input into the production of flour. In turn flour is an intermediate product which is then used to produce the final product, bread.

Quarterly overview

Final demand increased 0.9% this quarter with rises across most industries. Service output prices were influenced by increased operating costs and higher prices linked to fees. Construction output prices continue to contribute to the increase in Final demand, while falls in crude oil and petroleum-based outputs partially offset these rises.

 Dec Qtr 2023 to Mar Qtr 2024Mar Qtr 2023 to Mar Qtr 2024
Final demand% change% change
Final demand (excl. exports)0.94.3

Index reference period: 2011-12 = 100.0.

The main contributors to quarterly growth in Final demand were:

  • Property operators (+2.1%), driven by fees linked to increased rents as demand for rental dwellings outstrips supply.
  • Tertiary education (+5.3%), due to rising operating costs and higher tuition fees.
  • Residential building construction (+1.3%), due to ongoing skilled labour and material shortages, particularly for the finishing stages of house building.
  • Non-residential building construction (+1.8%), driven by competition with other sectors for skilled labour and materials, and increasing margins applied to manage resource availability risk.
     

Rounding

Any discrepancies between totals and sums of components in this publication are due to rounding.

Construction

Input to the house construction industry

Input prices to the house construction industry rose 0.4%.

Input prices to house construction recorded a rise of 0.4% in the March quarter. Prices for Other materials and Other metal products rose due to increases in raw material prices, notably aluminium and gypsum. Suppliers are continuing to pass through increased input costs from higher energy prices for products such as aluminium windows and doors, and plaster products.

Discounted products used earlier in construction such as structural timber is partially offsetting the quarterly rise as demand for new house construction continues to soften.

Over the past twelve months, Input prices to house construction rose 1.3%.

In building materials, the main contributors were:

  • Other materials (+2.0%), driven by plaster products (+3.5%), due to elevated input costs into manufacturing, and low gypsum supply.
  • Other metal products (+0.5%), driven by aluminium windows and doors (+1.0%), due to rising raw material costs, and elevated road freight costs in recent quarters.
  • Ceramic products (+1.5%), driven by ceramic tiles (+3.9%), due to strong demand for finishing products, and higher import costs.

Partially offsetting this were price falls in: 

  • Timber, board and joinery (-0.5%), driven by structural timber (-2.5%), due to increased volume of softwood imports, and decreasing demand for new house construction.
     

Capital city price movements (Territory prices are not sampled):

  • Sydney (+0.1%), driven by Concrete, cement and sand (+2.8%).
  • Melbourne (+0.4%), driven by Other materials (+1.8%).
  • Brisbane (+0.6%), driven by Other materials (+4.4%).
  • Adelaide (+1.3%), driven by Timber, board and joinery (+1.7%).
  • Perth (+0.9%), driven by Other metal products (+3.5%).
  • Hobart (+0.4%), driven by Steel products (+3.2%).

Output of the construction industry

Output prices of the construction industries rose.

Building construction prices rose 1.6% this quarter and 5.9% over the past twelve months. 

Growth in the Output of the construction industries was driven by ongoing labour shortages for skilled tradespeople, with industry demand placing upward pressure on output costs. While most material prices continued to stabilise, prices increased for concrete based structural components due to high demand, high manufacturing costs, and labour shortages. The ongoing activity in the non-residential market, coupled with pressure from the residential and infrastructure sectors, continued to drive competition for limited resources.

The quarterly price movements by class were: 

  • House construction (+1.0%). 
  • Other residential building construction (+1.8%). 
  • Non-residential construction (+1.7%). 

House construction prices rose 1.0%.

House construction prices rose this quarter, driven by increases in Western Australia and Victoria. Ongoing labour shortages for finishing trades, price rises for end stage materials, and the resulting cost escalations drove price rises this quarter, contributing to base price rises. Differing demand across capital cities impacted builders' ability to recover and maintain margins, with increased demand in Western Australia resulting in higher prices. Increased bonus offers to attract new business offset base price rises in New South Wales, as demand for new house construction continued to weaken. 

Over the past twelve months, House construction prices rose 4.3%.

Other residential building construction prices rose 1.8%.

Growth in Other residential construction prices were driven by New South Wales and Queensland. Ongoing labour shortages for skilled tradespeople are the primary cause for price increases this quarter. Increased margins also contributed to the price rise as project risk associated with resource and labour availability and demand from a strong pipeline of infrastructure projects remain. High prices for concrete based structural components due to manufacturing input cost increases also placed upward pressure on overall cost.

Over the past twelve months, Other residential building construction prices rose 7.0%.

Non-residential construction prices rose 1.7%.

Non-residential construction prices increased, driven by rises in New South Wales and Victoria. The price rise was due to contractors and subcontractors attempting to restore or maintain margins, with prices reflecting both recent and expected labour and material cost increases.

Over the past twelve months, Non-residential building construction prices rose 6.6%.

Heavy and civil engineering construction prices rose 1.4%.

  • Other heavy and civil engineering construction (+1.3%) rose due to supplier price rises, particularly for concrete materials. Rising wage costs due to skilled labour shortages also contributed to the rise.
  • Road and bridge construction (+1.5%) rose due to supplier price rises and increased concrete prices amid ongoing demand from infrastructure projects and repairs for flood damaged roads.

Heavy and civil engineering construction prices rose 3.7% over the past twelve months.

Mining industries

Input to the coal mining industry

Input to the coal mining industry fell 1.0%.

The main contributors were:

  • Petroleum and coal product manufacturing due to falls in diesel prices driven by weaker global demand.
  • Rail transport due to discounting amid lower transport volumes and a fall in the fuel surcharge.

This movement was partially offset by: 

  • Repair and maintenance due to an increase in contractor fees resulting from a shortage of skilled labour. 

Over the past twelve months, Input to the coal mining industry prices rose 4.4%.

Output of the mining industry

Gas extraction, domestic rose 0.5%.

Prices received for Gas extraction, domestic rose 0.5%, due to a higher amount of spot market sales to domestic buyers compared to the previous quarter.

The quarterly price rise for Gas extraction, domestic comprised of:

  • East coast production (+0.1%).
  • West coast production (+2.0%). 

Over the past twelve months Gas extraction, domestic rose 7.4%.

East coast represents domestic gas extraction in Queensland, New South Wales, Victoria, and South Australia while West coast represents domestic gas extraction in Western Australia.

Manufacturing

Input to the manufacturing industry

Input prices to manufacturing rose 0.8%.

Input prices to manufacturing rose 0.8% in the March quarter and fell 0.9% over the past twelve months.

The main contributors to the input price rise were: 

  • Agriculture to manufacturing (+6.9%), due to tightened cattle and sheep supply with favourable grazing conditions prompting farmers to hold onto stock.
  • Metal ore mining (+0.9%), due to strong gold demand prompted by global economic and geopolitical uncertainty. 

Offsetting the rise, were price falls in: 

  • Fabricated metal products (-5.3%), due to falling iron and steel prices caused by lower global demand and lower shipping rates.
  • Oil and gas extraction (-1.6%), due to lower crude oil amid weakened global demand.   
  • Petroleum and coal products (-4.5%), due to a decline in wholesale prices for diesel amid strengthened global supply and weaker demand. 

Output of the manufacturing industry

Output prices of the manufacturing industries rose 0.3%.

Output prices received by manufacturing industries rose 0.3% in the March quarter and 2.1% over the past twelve months.

The main contributors to output price rises of the manufacturing industries were: 

  • Basic non-ferrous metal manufacturing (+2.6%), due to strong gold demand prompted by global economic and geopolitical uncertainty.
  • Meat and meat product manufacturing (+1.2%), due to tightening supply as favourable grazing conditions prompting farmers to hold onto their stock. 
  • Structural metal product manufacturing (+1.4%), due to increased input costs over recent quarters, including labour and energy, reflected in output prices this quarter.

Offsetting the rise were price falls in:

  • Petroleum & coal product manufacturing (-4.3%), due to weaker global demand and improved supply for diesel. 
  • Basic chemical manufacturing (-19.8%), due to lower lithium prices reflecting the ongoing subdued demand for electric vehicle battery metals. 
  • Fertiliser & pesticide manufacturing (-7.3%), due to global fertiliser supply surpassing demand. 

Services

Output of the services industries

Accommodation and food services prices rose, driven by:

  • Accommodation services (+2.7%), due to demand from cultural, arts and sporting events, and a continuation of the summer school holidays.
  • Cafes, restaurants and takeaway food services (+0.5%), due to higher input and operating costs.

Over the past twelve months:

  • Accommodation services prices fell 1.3%.
  • Cafes, restaurants and takeaway food services prices rose 5.3%.

Transport, postal and warehousing services prices fell, driven by:

  • Water freight transport (-16.4%), due to continued easing in prices from the peak in 2022 as vessel and container availability improved.
  • Rail freight transport (-3.6%), due to falling diesel prices and easing demand.
  • Other warehousing and storage services (-2.3%), due to increased competition and reduced demand following the December quarter.

Over the past twelve months:

  • Water freight transport prices fell 37.6%. 
  • Rail freight transport prices rose 2.1%. 
  • Other warehousing and storage services rose 2.7%.

Rental, hiring and real estate services prices rose, driven by:

  • Non-residential property operators (+1.9%), due to further rises in industrial rents as demand for warehouses and distribution centres continues to outpace supply. 
  • Real estate services (+1.5%), due to increased supply of advertised property listings and growth in property prices that flowed to higher services fees.

This was partially offset by:

  • Other goods and equipment rental and hiring (-1.6%), due to lower equipment hire demand in mining and key heavy industrial building markets.

Over the past twelve months:

  • Non-residential property operators rose 6.7%. 
  • Real estate services fell 0.8%. 
  • Other goods and equipment rental and hiring rose 3.0%. 

Education and training services

Education and training services prices rose in the March quarter 2024 as tuition fees across a range of universities and course levels increased due to indexation clauses and higher operating costs. Price rises were recorded in: 

  • Higher education, domestic (+6.9%), and
  • Higher education, exports (+5.2%).

Health care and social assistance industries rose, driven by:

  • Child care services (+1.6%), due to increases in gross operating costs and staff shortages. 
  • Medical services (+0.6%), due to increases in the running costs of small practices and surgeries. 
  • Allied health services (+1.2%), driven by dental services due to increased running costs. 

Over the past twelve months: 

  • Child care services rose 8.1%. 
  • Medical services rose 4.8%. 
  • Allied health services rose 4.5%. 

Data downloads

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Time series

Data files
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Datacubes

Data files

  • Table 5 Final demand: contribution to final demand index by industry - index points

    Download xlsx [27.97 KB]

  • Table 28 Contribution to input to the manufacturing industries index, subdivision and index points

    Download xlsx [26.78 KB]

  • Table 29 Contribution to output of the manufacturing industries index, group and index points

    Download xlsx [23.74 KB]

  • Table 30 Contribution to input to the house construction industry index, weighted average of six state capital cities, index points

    Download xlsx [23.47 KB]

Data Explorer datasets

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For more information about Data Explorer, see the Data Explorer user guide.

Final demand

Final Demand, index numbers and percentage changes

Construction

Input to the house construction industry

Input to the House construction industry index, weighted average of six state capital cities, index numbers and index points 

Output of the construction industry

Output of the Construction industries, subdivision and class index numbers 

Mining industries

Input to the coal mining industry

Input to the Coal mining industry, index number and percentage changes

Output of the mining industry

Output of the Mining industries, index numbers

Manufacturing

Input to the manufacturing industry

Input to the Manufacturing industries, index numbers

Contribution to Input of the Manufacturing industries index, subdivision and index points 

Output of the manufacturing industry

Output of the Food manufacturing industries, subdivision, group and class index numbers

Output of the Beverage and tobacco product manufacturing industries, subdivision, group and class index numbers

Output of the Textile, leather, clothing and footwear manufacturing industries, subdivision, group and class index numbers

Output of the Wood product manufacturing industries, subdivision, group and class index numbers

Output of the Pulp, paper and converted paper product manufacturing industries, subdivision, group and class index numbers

Output of the Printing (including the reproduction of recorded media) industries, subdivision, group and class index numbers

Output of the Petroleum and coal product manufacturing industries, subdivision, group and class index numbers

Output of the Basic chemical and chemical product manufacturing industries, subdivision, group and class index numbers

Output of the Polymer product and rubber product manufacturing industries, subdivision, group and class index numbers

Output of the Non-metallic mineral product manufacturing industries, subdivision, group and class index numbers

Output of the Primary metal and metal product manufacturing industries, subdivision, group and class index numbers

Output of the Fabricated metal product manufacturing industries, subdivision, group and class index numbers

Output of the Transport equipment manufacturing industries, subdivision, group and class index numbers

Output of the Machinery and equipment manufacturing industries, subdivision, group and class index numbers

Output of the Furniture and other manufacturing industries, subdivision, group and class index numbers

Contribution to Output to the Manufacturing industries index, group index points 

Services

Selected Output of the Service industries, index numbers

Previous catalogue number

This release previously used catalogue number 6427.0.

Using price indexes

Price indexes in contracts

Price indexes published by the Australian Bureau of Statistics (ABS) provide summary measures of the movements in various categories of prices over time. They are published primarily for use in Government economic analysis. Price indexes are also often used in contracts by businesses and government to adjust payments and/or charges to take account of changes in categories of prices (Indexation Clauses).

Use of Price Indexes in Contracts sets out a range of issues that should be taken into account by parties considering including an Indexation Clause in a contract using an ABS published price index.

Changes in this issue

From the March Quarter 2024, the following selected ANZSIC groups and classes have been added to Table 5. Final demand: contribution to final demand index by industry - index points:

  • Group 301 Residential building construction
  • Group 302 Non-residential building construction
  • Class 3101 Road and bridge construction
  • Class 3109 Other heavy and civil engineering construction
  • Group 671 Property operators
  • Group 771 Public order and safety
  • Group 810 Tertiary education
  • Group 851 Medical services
  • Group 853 Allied health services 

The inclusion of Group 802 School education within Table 5 has been delayed and will be included at a later stage.

The following selected ANZSIC codes have been discontinued from publication in Table 5. Final demand: contribution to final demand index by industry - index points:

  • Group 041 Fishing
  • Group 182 Basic polymer manufacturing
  • Group 212 Basic ferrous metal product manufacturing
  • Subdivision 30 Building construction (replaced with detailed Groups 301 and 302)
  • Subdivision 31 Heavy and civil engineering construction (replaced with detailed Classes 3101 and 3109)

Methodology

Producer Price Indexes, Australia methodology, March 2024