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
December 2022
Released
27/01/2023
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Key statistics

Final demand (excluding exports)

  • Rose 0.7% this quarter.
  • Rose 5.8% 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.

Changes in future issues

From the March quarter 2023, the following additional indexes will be included in the Time Series Spreadsheets:

Table 35. Output of the Health care and social assistance industries will include group and class index numbers for:

  • Group 853 Allied health services
  • Class 8531 Dental services
  • Class 8532 Optometry and optical dispensing
  • Class 8533 Physiotherapy services
  • Class 8534 Chiropractic and osteopathic services
  • Class 8591 Ambulance services

A review of the Input to mining PPI will be undertaken in the March quarter 2023, consisting of an update of the weights for the Input to mining index.

Quarterly overview

Construction and Computer and electronic equipment manufacturing industries drove the increase in Final demand this quarter.

 Sep Qtr 22 to Dec Qtr 22Dec Qtr 21 to Dec Qtr 22
Final demand

% change

% change

Final demand (excl. exports)0.75.8

Index reference period: 2011-12 - 100.0.

The main contributors to quarterly growth in Final demand were:

  • Output of building construction (+1.6%), due to ongoing supply chain disruptions for imported products, coupled with high demand for finishing stage materials and skilled labour shortages.
  • Heavy and civil engineering construction (+1.5%), due to increased costs for diesel and strong demand for skilled labour.
  • Computer and electronic equipment manufacturing (+4.2%) due to exchange rate impacts.

Offsetting the rise were price falls in:

  • Petroleum refining and petroleum fuel manufacturing (-10.0%), due to a fall in global crude oil prices and a rise in global fuel production.
  • Other agriculture (-7.4%), due to a fall in prices of select commodities, as supply levels recover from flood events during September quarter 2022.
  • Electricity supply; gas supply; and water supply, sewerage and drainage services (-2.6%), due to a fall in industrial electricity prices following a decrease in wholesale prices.

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 2.2%

Input prices to house construction increased 2.2% in the December quarter 2022, reflecting a range of increases in plywood, glass, plasterboard, and carpet. Suppliers are passing through increases as sustained activity in the residential construction sector continues to place upward pressure on finishing stage material prices. High fuel and energy costs have also contributed to the material price increases this quarter.

Over the past twelve months, Input prices to house construction rose 14.2%.

Input prices to house construction rose in line with rising input costs and sustained demand for finishing stage building materials. The main contributors were:

  • Timber, board and joinery (+2.1%), driven by cupboards and built-in furniture (+5.6%), due to supply constraints for plywood, and increased glass prices.
  • Other materials (+3.1%), driven by plaster products (+3.3%), due to increasing global gypsum prices, and high manufacturing and freight costs.
  • Concrete, cement and sand (+5.0%), driven by ready mixed concrete (+4.8%), due to increased costs for sand, cement and aggregate, coupled with high demand from the construction sector.

Offsetting the rise, were price falls in:

  • Steel products (-2.1%), driven by steel beams and sections (-2.7%), due to reduced steel costs, improved supply conditions and lower shipping costs.
  • Electrical equipment (-0.3%), driven by electrical cable and conduit (-1.0%), due to decreases in global copper and PVC prices, and lower import costs.

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

  • Sydney (+3.1%), driven by Timber, board and joinery (+5.4%).
  • Melbourne (+1.2%), driven by Plumbing products (+4.1%).
  • Brisbane (+2.8%), driven by Other materials (7.8%).
  • Adelaide (+1.9%), driven by Other metal products (+3.9%).
  • Perth (+2.5%), driven by Timber, board and joinery (+4.2%).
  • Hobart (+1.9%), driven by Timber, board and joinery (+2.5%).

Output of the construction industry

Output prices of the construction industries

Building construction prices rose 1.6% this quarter and 11.4% over the past twelve months.

Growth in the Output of the construction industries continued to be driven by a shortage of skilled and unskilled labour, high freight costs, and ongoing supply constraints for finishing stage materials. Increased activity in the non-residential market, coupled with ongoing pressure from the residential and infrastructure sectors, drove strong demand for limited resources.

The quarterly price movements by class were:

  • House construction (+1.1%).
  • Other residential building construction (+1.9%).
  • Non-residential construction (+1.9%).

House construction prices rose 1.1%

House construction prices rose in December quarter 2022, albeit at a slower rate than recent quarters. The rise was driven by increases in New South Wales, South Australia, and Queensland. Ongoing labour shortages for skilled trades drove price increases this quarter, specifically bricklayers, carpenters, and roofers. A decrease in the Northern Territory, due to weaker consumer demand, was partially offsetting the increase this quarter.

While growth has eased this quarter, House construction prices have risen 17.2% over the past twelve months.

Other residential building construction prices rose 1.9%

Other residential construction prices increased this quarter driven by strong growth in Victoria and South Australia. Supply chain disruptions for imported products, coupled with high demand for finishing stage materials and trades, drove price increases. Ongoing skilled labour shortages placed further pressure on input costs. 

Over the past twelve months, Other residential building construction prices rose 8.1%. 

Non-residential construction prices rose 1.9%

Non-residential construction prices increased this quarter, driven by strong growth in Victoria and South Australia as material costs continued to be passed through and skilled labour remained in high demand. A decrease in Western Australia, due to falling steel prices and reduced costs for beginning stage skilled trades, such as masonry and structural construction, was partially offsetting the increase this quarter.

Over the past twelve months, Non-residential building construction prices rose 8.7%.

Heavy and civil engineering construction prices rose 1.4%

  • Other heavy and civil engineering construction prices rose due to increased costs for diesel, and strong demand for skilled labour.
  • Road and bridge construction prices rose due to increased costs for concrete and bitumen driven by high energy and manufacturing costs coupled with strong global demand and limited supply.

Heavy and civil engineering construction prices rose 9.6% over the past twelve months.

Mining industries

Input to the coal mining industry

Input to the coal mining industry rose 1.6%

The main contributors were:

  • Petroleum and coal product manufacturing, due to increased diesel prices.
  • Machinery and equipment manufacturing, due to increases in imported mining machinery prices driven by rising manufacturing and import costs.

Over the past twelve months, Input to the coal mining industry prices rose 10.1%.

Output of the mining industry

Gas extraction, domestic fell 17.7%

Prices received for Gas extraction, domestic fell 17.7%, returning from the peak level in the September quarter 2022.

Over the past twelve months Gas extraction, domestic rose 24.2%.

Falling demand for East coast gas extraction drove the price decline in domestic gas extraction this quarter

Domestic gas extraction quarterly price change

This map shows Domestic gas extraction quarterly price change.

West coast rose 5.6%

Prices for Western Australia domestic gas extraction increased over the quarter due to contract price escalation. 

East coast fell 21.7%

Prices for East coast domestic gas extraction returned from peak levels due to falling domestic and international demand amid mild weather and a decrease in international crude oil prices.

Manufacturing

Input to the manufacturing industry

Input prices to manufacturing fell 0.3%

Input prices to manufacturing fell 0.3% over the quarter and rose 10.8% over the past twelve months. This is the first time that the headline index has fallen since the June quarter 2020.

The main contributors to input price falls to the manufacturing industries were:

  • Oil and gas extraction to manufacturing (-11.6%), due to the passing through of falls in wholesale gas prices following the increases seen last quarter.
  • Electricity supply to manufacturing (-9.1%), as electricity prices returned from the peak level of September quarter 2022 due to significant falls in spot prices.
  • Agriculture to manufacturing (-1.2%), due to a seasonal increase in the supply of milk.

Offsetting the fall, were price rises in:

  • Metal ore mining to manufacturing (+3.1%), due to a rise in investor demand for gold with expectations that Federal Reserve rate rises will continue to ease.
  • Petroleum and coal product manufacturing to manufacturing (+8.7%), due to an increase in diesel prices.
  • Machinery and equipment to manufacturing (+3.4%), due to the depreciation of the Australian dollar against the US dollar leading to price rises in imported electric motors and generators.

Output of the manufacturing industry

Output prices of the manufacturing industries rose 1.0%

Output prices of the manufacturing industries rose 1.0% over the December quarter and 10.9% over the past twelve months.

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

  • Other basic non-ferrous metal manufacturing (+6.1%), due to a rise in investor demand for gold with expectations that Federal Reserve rate rises will continue to ease.
  • Log sawmilling (+26.5%), due to increases in hardwood prices as high fuel costs and strong demand place upward pressure on prices.
  • Human pharmaceutical and medicinal product manufacturing (+3.9%), due to the application of annual price increases to pharmaceutical products.

Offsetting the rise were price falls in:

  • Petroleum refining and petroleum fuel manufacturing (-7.0%), due to decreasing diesel and petrol prices consistent with a fall in global crude oil prices while the rise in global fuel production has also eased pressure on prices.
  • Iron smelting and steel manufacturing (-4.8%), due to a fall in global demand for steel products amid subdued construction activity in China during COVID lockdown.

Services

Output of the services industries

Accommodation and food services prices rose, driven by:

  • Accommodation services (+7.6%), due to increased demand during Spring and Summer school holidays, returning international travellers and domestic travellers substituting overseas holidays for domestic holidays.
  • Cafes, restaurants, and takeaway food services (+2.0%), due to higher input costs and wage increases.

Over the past twelve months:

  • Accommodation services prices rose 22.9%.
  • Cafes, restaurants, and takeaway food services prices rose 6.4%.

 

Transport, postal and warehousing prices fell, driven by:

  • Rail freight transport (-1.0%), due to pricing adjustments in long term contracts.
  • Water freight transport (-2.1%), due to easing of global supply chain congestion issues.

This was partially offset by:

  • Road freight transport (+0.7%), due to the passing through of rising fuel prices and heavy rain and flooding causing logistical issues.

Over the past twelve months:

  • Rail freight transport prices rose 5.4%.
  • Water freight transport prices rose 0.3%.
  • Road freight transport prices rose 12.9%.

 

Information media and telecommunications services prices fell

Information media and telecommunications services prices fell in December quarter 2022, driven by an increasingly competitive market from the growing presence of online and social media platforms and discounting activity to retain market share. Price falls were recorded in:

  • Newspaper publishing (-6.5%)
  • Electronic information storage services (-4.5%)
  • Magazine and other periodical publishing (-5.2%)

This was partially offset by:

  • Book publishing (+0.5%), due to labour shortages and continued pressures from the high cost of paper, printing, freight and logistics.

Over the past twelve months:

  • Newspaper publishing fell 3.7%.
  • Electronic information storage services fell 0.3%.
  • Magazine and other periodical publishing fell 4.8%.
  • Book publishing rose 0.7%.

 

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

  • Non-residential property operators (+1.5%), due to further rises in industrial rents as demand for warehouse space in the lead up to Christmas continued amid tight supply.
  • Other goods and equipment rental and hiring (+1.3%), due to increased operating costs being passed on during scheduled pricing reviews.
  • Passenger car rental and hiring (+5.7%), due to increased demand over the holiday period.

Over the past twelve months:

  • Non-residential property operators prices rose 8.1%.
  • Other goods and equipment rental and hiring prices rose 6.8%.
  • Passenger car rental and hiring rose 30.0%.

Professional, scientific, and technical services prices rose, driven by:

  • Legal and accounting services (+0.8%), due to increased competition in the skilled labour market as staff shortages push up wages.
  • Management advice and related consulting services (+0.8%), due to sustained demand for services and increased wages to attract and retain staff.
  • Architectural, engineering and technical services (+0.2%), due to high demand for services from infrastructure programs and labour supply constraints.

Over the past twelve months:

  • Legal and accounting services prices rose 3.7%.
  • Management advice and related consulting services prices rose 4.0%.
  • Architectural, engineering and technical services prices rose 3.7%.

Other services industries rose, driven by:

  • Hairdressing and beauty services (+2.0%), due to increased demand during the festive season and increased input costs being passed on.
  • Laundry and dry-cleaning services (+1.1%), due to increases in utility, labour, linen and freight costs.
  • Funeral, crematorium and cemetery services (+0.9%), due to increases in input, labour and maintenance costs.

Over the past twelve months:

  • Hairdressing and beauty services prices rose 6.1%.
  • Laundry and dry-cleaning services prices rose 10.2%.
  • Funeral, crematorium and cemetery services prices rose 6.1%.

Data downloads

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Time series

Data files

  • Table 1. Final demand, Index Numbers and Percentage Changes.

    Download xlsx [47.78 KB]

  • Table 11. Input to the Coal mining industry, index numbers and percentage changes

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  • Table 12. Output of the Manufacturing industries, division, subdivision, group and class index numbers

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  • Table 13. Input to the Manufacturing industries, division and selected industries, index numbers and percentage changes

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  • Table 14. Input to the Manufacturing industries, subdivision index numbers

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  • Table 17. Output of the Construction industries, subdivision and class index numbers

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  • Table 18. Input to the House construction industry, six state capital cities, weighted average and city, index numbers and percentage changes

    Download xlsx [179.8 KB]

  • Table 20. Output of the Accommodation and food services industries, group index numbers

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  • Table 21. Output of the Transport, postal and warehousing industries, group and class index numbers

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  • Table 22. Output of the Information media and telecommunications industries, group and class index numbers

    Download xlsx [52.15 KB]

  • Table 23. Output of the Rental, hiring and real estate services industries, subdivision, group and class index numbers

    Download xlsx [51 KB]

  • Table 24. Output of the Professional, scientific and technical services industries, group and class index numbers

    Download xlsx [54.68 KB]

  • Table 25. Output of the Administrative and support services industries, group and class index numbers

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  • Table 26. Output of the Public administration and safety industries, group and class index numbers

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  • Table 27. Output of the Other services industries, group and class index numbers

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  • Table 34. Output of the Education and training industries, group and class index numbers

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  • Table 35. Output of the Health care and social assistance industries, group and class index numbers

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  • Table 36. Output of the Mining industries, index numbers

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Datacubes

Data files

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

    Download xlsx [27.7 KB]

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

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

    Download xlsx [23.72 KB]

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

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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 release

There have been no changes to this quarter's release.

See the full history of changes.

Additional information

The compilation of the quarterly Producer Price Index for the Output of the Retail Trade Industry, normally released as an additional update of the Producer Price Indexes, Australia (ABS cat. No. 6427.0), has been paused indefinitely as a result of changing priorities within the ABS as a result of the COVID-19 pandemic.

Methodology

Producer Price Indexes, Australia methodology, December 2022