Latest release

Historical Development

Producer and International Trade Price Indexes: Concepts, Sources and Methods
Reference period
2022
Released
29/04/2022
Next release Unknown
First release

The first Producer Price Indexes compiled by the ABS was the Melbourne Wholesale Price Index. This index was introduced in 1912 with historical index numbers from 1861. Prices were obtained from newspapers and trade publications. The index was compiled until 1961. The index primarily included basic materials and food stuffs, weighted together using consumption data from 1910. Neither the list of products nor the weighting varied during the life of the index. 

The Wholesale Price (Basic Materials and Foodstuffs) Index was introduced in 1939 with historical index numbers available from 1928. The index was compiled until 1970. The prices used in the index were, in the main, obtained directly from manufacturers and merchants in Melbourne (with a few important exceptions). Products in the index were priced in their basic form wherever possible and in respect of imported materials as near as possible to the point where they made their first effective impact on the local price structure. The weights were based on estimates of the average annual consumption of the products in Australia during the period 1928-29 to 1934-35 inclusive. 

Over the 1960s, 1970s and 1980s a number of new indexes were introduced. These included monthly input indexes of the building construction industry, monthly input and output indexes of the manufacturing industry, and monthly input indexes of the coal mining industry. From 1997 these indexes were compiled and published on a quarterly basis. From 2000 the ABS introduced quarterly construction industry output price indexes, services industries output price indexes, and stage of production price indexes. From the June quarter 2001 a number of Producer Price Index industry publications were amalgamated into a single publication, Producer Price Indexes, Australia.

An industry approach to defining and weighting the Producer Price Indexes was adopted from the September quarter 2012 as a result of the Producer and International Trade Price Indexes Review. This approach replaced the product approach. As a consequence, the PPIs are compiled using weights and prices for products used by, or produced by, businesses classified to industries as defined in the Australian and New Zealand Standard Industry Classification. The titles of the indexes were also changed to reflect the industry approach.

More information on the outcome and implementation of the review of the Producer and International Trade Price Indexes can be found in the Information Paper: Outcome of the Review of the Producer and International Trade Price Indexes, 2012 and Information Paper: Implementation of the Review of the Producer and International Trade Price Indexes, 2012.

In December 2019 the ABS discontinued the Stage of Production (SOP) series and instead moved to publishing only the Final Demand (excluding exports) series. The SOP indexes included (Preliminary, Intermediate, and Final demand). The discontinuation resulted from a review undertaken by the ABS in consultation with key users. The review identified more detailed analysis and coverage of industry indexes was more desired than SOP outputs. The ABS agreed to focusing efforts towards enhancing industry indexes, expanding coverage, and completing a weighting review of the PPI's.

The Import Price Index and Export Price Index are annually re-weighted chained Lowe indexes. This method of weighting was introduced for the September quarter 2000 and replaced the 'fixed-base' method of weighting in which the weighting patterns were updated infrequently (generally once every 5 or 10 years).

In March quarter 2022 the ABS re-weighted PPI indexes in line with the 2018/19 Australian National Accounts: Input-Output tables. Included in the re-weight were the Final demand, Input to the Manufacturing, Output of the Manufacturing, Output of the Services, and Division B Output of the mining indexes. Excluded from the re-weight were the Construction industries and Input to the Coal mining index. Weighting patterns of the PPIs are updated infrequently (generally once every 5 or 10 years).