Latest release

Producer Price Indexes, Australia

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

Reference period
June 2021
Released
30/07/2021
Future Releases
  • Next Release 29/10/2021
    Producer Price Indexes, Australia, September 2021
  • Next Release 28/01/2022
    Producer Price Indexes, Australia, December 2021
  • Next Release 29/04/2022
    Producer Price Indexes, Australia, March 2022
  • View all releases

Key statistics

Final demand (excluding exports)

  • Rose 0.7% this quarter.
  • Rose 2.2% over the past twelve months.

There are revisions in this issue due to the incorporation of more up-to-date data for the March quarter 2021 Accommodation index. There is no impact on PPI Final Demand.

The series impacted are annotated in the time series spreadsheet Table 20.

Quarterly overview

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 Mar Qtr 21 to Jun Qtr 21Jun Qtr 20 to Jun Qtr 21
Final demand

% change

% change

Final demand (excl. exports)0.72.2
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Index reference period: 2011-12 - 100.0.

The main contributors to quarterly growth in Final demand were:

  • Heavy and civil engineering construction (+1.8%), due to increases in wages and materials driven by public sector investment in transport infrastructure projects.
  • Output of building construction (+1.8%), due to house builders capitalising on improved buyer interest by increasing base prices and reducing bonus offers to pass through material cost increases.
  • Petroleum refining and petroleum fuel manufacturing (+12.1%), due to increases in global crude oil prices, influenced by increasing demand and ongoing OPEC+ supply cuts.

Offsetting the rise were price falls in:

  • Electricity supply, gas supply; and water supply, sewerage and drainage services (-2.5%), due to falls in contractual pricing on electricity supply.
  • Commercial fishing (-12.7%), due to increased seasonal supply of King prawns.

The continuation of industry recovery is reflected in the annual results, the rise of 2.2% to June 2021 is the strongest annual increase since September 2014.

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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 2.6%

Input prices to house construction rose due to Federal Homebuilder and state-based grants driving demand for housing. Shortages for some materials have placed further upward pressure on prices.

Over the past twelve months, Input to house construction prices rose 4.0%, due to; Other metal products (+3.8%) and Plumbing products (+6.0%).

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Input prices to house construction rose in line with increased demand for building materials, the main contributors were:

  • Timber, board and joinery (+3.9%), driven by structural timber (+6.6%), due to global timber price increases as a result of supply shortages and increased demand for softwood.
  • Other metal products (+1.9%), driven by aluminium windows and doors (+2.2%), due to price rises in aluminium, glass and timber as a result of increasing international freight costs and production shortages.
  • Electrical equipment (+4.4%), driven by electric cable and conduit (+10.0%), due to price rises in copper and resin.
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Capital city price movements (Territory prices are not sampled):

  • Sydney 3.4%, driven by Timber board and joinery (+6.4%).
  • Brisbane 3.0%, driven by Timber board and joinery (+3.9%).
  • Hobart 2.6%, driven by Steel products (+18.3%).
  • Melbourne 2.3%, Timber board and joinery (+2.7%).
  • Adelaide 2.0%, driven by Plumbing products (+3.5%).
  • Perth 1.7%, driven by Timber board and joinery (+2.9%).
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Output of the construction industry

Output prices of the construction industries

Building construction prices rose 1.9% this quarter and 3.3% over the past twelve months.

Federal and state (Western Australia and Tasmania) based Homebuilder grants coupled with government investment in infrastructure has resulted in increased activity, driving demand for labour and putting upward pressure on material prices.

The quarterly price movements by class were:

  • House construction (+1.7%)
  • Other residential building construction (+1.9%)
  • Non-residential construction (+2.0%)
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House construction prices rose 1.7%

House construction prices rose, driven by rising material costs in timber and steel, increased base prices and reduced bonus offers. House builders are continuing to capitalise on increased demand and passing on rising costs.

Over the past twelve months House construction prices rose 5.6%.

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Other residential building construction prices rose 1.9%

Other residential construction prices recorded its largest increase since the September quarter 2008. The price rise was driven by increases in materials and trade costs across all states. Rises in head contractor margins and preliminary costs were also recorded in Tasmania. Increased demand for skilled trades and the availability of jobs for tender allowed subcontractors to pass on price increases in materials and labour costs previously absorbed by a reduction in margins.

Over the past twelve months Other residential building construction prices rose 1.7%. 

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Non-residential construction prices rose 2.0%

Non-residential construction prices recorded its largest increase since the September quarter 2008. Rises in materials and trade costs across all states, coupled with head contractor margin and preliminary cost rises in Tasmania drove the price increase this quarter. An increased demand for skilled trades and a rise in the number of jobs for tender allowed subcontractors to pass on the price increases in material and labour cost previously absorbed by a reduction in margins. 

Over the past twelve months Non-residential building construction prices rose 2.5%.

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Heavy and civil engineering construction prices rose 1.7%

  • Other heavy and civil engineering construction prices rose, due to increased wages, plastic pipes and steel products.
  • Road and bridge construction prices rose due to price rises for steel, bitumen and transport costs.

Over the past twelve months, Heavy and Civil engineering construction prices rose 2.4%.

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Mining industries

Input to the coal mining industry

Input prices to the coal mining industry rose 1.5%, due to:

  • Petroleum and coal product manufacturing, driven by an increase in diesel prices reflecting rising global crude oil prices and continued recovery in domestic demand for transport fuel.
  • Structural metal product manufacturing, driven by an increase in steel prices resulting from increasing global iron ore prices.

Over the past twelve months Input prices to the coal mining industry rose 2.7%.

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Output of the mining industry

Prices received for Gas extraction, domestic rose 4.9%, due to increases in global crude oil and Asian LNG spot prices:

  • Domestic, East coast market prices rose 5.5%.
  • Domestic, Western Australia prices rose 0.8%.

Over the past twelve months Gas extraction, Domestic prices rose 3.1%.

 

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Manufacturing

Input to the manufacturing industry

Input prices to the manufacturing industries rose 3.7%

Input prices to manufacturing rose 3.7% over the quarter and rose 6.6% over the past twelve months.

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

  • Metal ore mining to manufacturing (+8.1%), due to tight global supplies and an increasing demand for steel and copper.
  • Primary metal and metal product to manufacturing (+7.6%), due to strong international demand in steel, aluminium and copper, driven by increases in construction activity, and continuing supply shortages are driving the increases.
  • Oil and gas extraction to manufacturing (+5.8%), due to increases in global crude oil prices driven by continued recovery in demand for transport fuel and ongoing OPEC+ production cuts.

Offsetting the rise, were price falls in:

  • Electricity supply to manufacturing (-3.0%), due to contract re-negotiation and fixed costs spread over higher consumption.
  • Coal mining to manufacturing (-5.0%), due to the impact of China’s ban on Australian black coal causing a temporary excess in domestic supply.
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Output of the manufacturing industry

Output prices of the manufacturing industries rose 2.4%

Output prices of the manufacturing industries rose 2.4% over the quarter and 3.5% over the past twelve months.

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

  • Petroleum refining and petroleum fuel manufacturing (+11.7%), due to increases in global crude oil prices, driven by continued recovery in demand for transport fuel and ongoing OPEC+ production cuts.
  • Meat processing manufacturing (+4.9%), due to high demand from Japan for high quality Australian beef, increased consumption of BBQ meats during the US summer and tight global supply.
  • Iron smelting and steel manufacturing (+6.3%), due to rising global iron ore prices and increased demand for steel.

Offsetting the rise, were price falls in:

  • Confectionery manufacturing (-6.7%), driven by discounting due to Easter and Mother’s Day promotions on chocolate.
  • Alumina production (-2.6%), driven by China’s emissions targets discouraging demand due to the implementation of restrictions on aluminium smelting operations to reduce carbon emissions.
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Services

Output of the services industries

Accommodation and food services prices rose, driven by: 

  • Accommodation services (+4.0%), due to increased domestic travel demand, resulting from the Federal Government’s tourism package and easing COVID-19 restrictions.
  • Cafes, restaurants, and takeaway food services (+0.3%), due to increasing input costs.

Over the past twelve months:

  • Accommodation services prices rose 13.9%.
  • Cafes, restaurant and takeaway food services prices rose 1.5%.

 

 

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Transport, postal and warehousing prices rose, driven by:

  • Water freight transport (+38.6%), due to congestion issues associated with COVID-19 lockdowns across Asia. Additional surcharges were applied to account for the disruptions and peak season demand. Water Freight Transport services recorded its highest price index since the time series started in the September quarter 1998.
  • Road freight transport (+1.2%), due to increased fuel costs.

Over the past twelve months:

  • Water freight transport prices rose 32.4%.
  • Road freight transport prices rose 0.8%.

 

 

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

  • Passenger car rental and hiring (+23.9%), due to increased domestic travel demand during April and reduced fleet sizes. New car stocks flowing to retailers has reduced the ability for car hire companies to increase their fleets. Passenger car rental and hiring services recorded its highest price index since the time series started in the December quarter 2001.
  • Real estate services (+2.3%), due to the strong housing market.

Over the past twelve months:

  • Passenger car rental and hiring prices rose 133.5%.
  • Real estate services prices rose 3.9%.

 

 

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

  • Accounting services (+1.3%), due to increases in charge out rates by small to medium firms, driven by wage costs. 
  • Management advice and related consulting services (+0.7%), due to increased demand for business consulting services and wage costs.
  • Engineering design and engineering consulting services (+0.4%), due to increased demand within the construction industry.  

Over the past twelve months:

  • Accounting services prices rose 3.8%.
  • Management advice and related consulting services prices rose 1.9%.
  • Engineering design and engineering consulting services prices rose 2.0%.
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Health care and social assistance industries prices rose, driven by: 

  • Child care services (+1.7%), due to increased demand resulting in price rises.

Over the past twelve months Child care prices rose 65.9%. The strong annual rise is due to prices returning following the Early Childhood Education and Care Relief Package introduced in the June quarter 2020.

 

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Data downloads

Data files
Data files

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 are revisions in this issue due to the incorporation of more up-to-date data for the March quarter 2021 Accommodation index. There is no impact on PPI Final Demand.

The series impacted are annotated in the time series spreadsheet Table 20.

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.