Producer Price Indexes, Australia

Latest release

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

Reference period
June 2022
Released
29/07/2022
  • Next Release 28/10/2022
    Producer Price Indexes, Australia, September 2022
  • Next Release 27/01/2023
    Producer Price Indexes, Australia, December 2022
  • Next Release 28/04/2023
    Producer Price Indexes, Australia, Issue For Mar 2023
  • View all releases

Key statistics

Final demand (excluding exports)

  • Rose 1.4% this quarter.
  • Rose 5.6% 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.

A review of the Construction PPIs will be undertaken in the September quarter 2022, consisting of an update of the weights for Other residential building construction and Non-residential construction.

Quarterly overview

 Mar Qtr 22 to Jun Qtr 22Jun Qtr 21 to Jun Qtr 22
Final demand

% change

% change

Final demand (excl. exports)1.45.6

Index reference period: 2011-12 - 100.0.

The main contributors to quarterly growth in Final demand were:

  • Output of building construction (+3.9%), driven by continuing supply constraints for timber and metals, high freight costs and labour shortages.
  • Petroleum refining and petroleum fuel manufacturing (+31.5%) due to a decrease in global crude oil supplies and increased demand in response to easing COVID19 restrictions.
  • Heavy and civil engineering construction (+2.8%), due to increases in diesel and material prices coupled with skilled trade shortages and high freight costs.

The annual rise of 5.6% in Final demand to June 2022 is the strongest increase since December 2008.

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 4.3%

Input prices to house construction rose 4.3% this quarter, primarily due to timber and other metals, driven by supply shortages and strong demand. Suppliers are passing through more of the price increases as ongoing supply constraints of building materials is unable to meet demand across house construction.    

Over the past twelve months, Input prices to house construction rose 17.3%, due to; Timber, board and joinery (+24.2%) and Other metal products (+18.4%).

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

  • Timber, board and joinery (+7.0%), driven by timber windows (+14.7%), due to ongoing supply constraints for timber, and strong freight prices.
  • Other metal products (+3.9%), driven by aluminium windows and doors (+4.9%), due to increased raw material prices, tight supply and strong global demand.
  • Other materials (+2.8%), driven by insulation (+8.4%), due to price rises for insulation materials, global production disruptions and strong freight prices.  

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

  • Sydney (+3.0%), driven by Timber, board and joinery (+3.1%).
  • Melbourne (+5.1%), driven by Timber, board and joinery (+9.2%).
  • Brisbane (+5.5%), driven by Timber, board and joinery (+10.4%).
  • Adelaide (+2.7%), driven by Timber, board and joinery (+3.8%).
  • Perth (+3.6%), driven by Other materials (+3.3%).
  • Hobart (+5.2%), driven by Other metal products (+14.2%).

Output of the construction industry

Output prices of the construction industries

Building construction prices rose 3.8% this quarter and 12.2% over the past twelve months. This is both the largest quarterly and annual increase since the series began.

Supply chain instability and high shipping costs, coupled with ongoing skilled labour shortages is continuing to drive up construction costs this quarter. Strong levels of activity across all construction sectors has enabled builders to pass through cost increases to buyers.

The quarterly price movements by class were:

  • House construction (+6.0%).
  • Other residential building construction (+2.4%).
  • Non-residential construction (+2.7%).

House construction prices rose 6.0%

House construction prices rose 6.0% this quarter, recording the strongest rise since the start of the series in 1996. Increases in prices of building materials were driven by rising freight costs while tightened supply for timber and metals is causing project delays. Shortages for skilled trades is placing further pressure on labour costs. Victoria recorded its strongest rise since the start of the series as builders continue to reduce bonus offers and raise base prices.

Over the past twelve months House construction prices rose 19.8%.

Other residential building construction prices rose 2.4%

Other residential construction prices increased across all states, with strong increases seen in Tasmania, Northern Territory and New South Wales. Ongoing metal, timber and fuel price increases, coupled with the tightened availability of skilled trades is placing further pressure on input costs, driving the increases this quarter.

Over the past twelve months Other residential building construction prices rose 7.7%.

Non-residential construction prices rose 2.7%

Non-residential construction prices increased across all states. Price rises are being driven by increased material costs for steel, concrete and reinforcement while rising prices for diesel fuel has increased operating and freight costs. Strong activity in the residential, civil infrastructure and mining sectors has placed additional pressure on wage costs with increased demand for skilled trades.

Over the past twelve months Non-residential building construction prices rose 8.8%.

Heavy and civil engineering construction prices rose 2.8%

  • Other and civil engineering construction prices rose due to increased costs for crude oil, freight and increasing costs for raw materials.
  • Road and bridge construction prices rose due to increased costs for steel and crude oil driven by global production disruptions, supply chain volatility and strong international and domestic demand.

Heavy and Civil engineering construction prices rose 9.0% over the past twelve months.

Mining industries

Input to the coal mining industry

Input to the coal mining industry rose 3.8%

The main contributors were:

  • Petroleum and coal product manufacturing due to higher global oil prices.
  • Machinery and equipment manufacturing due to increases in pricing for freight and labour, and suppliers passing on rising costs.

Over the past twelve months Input to the coal mining industry prices rose 11.6%.

Output of the mining industry

Gas extraction, Domestic rose 13.4%

Prices received for Gas extraction, Domestic rose 13.4%, the highest quarterly growth rate since September quarter 2017. Over the past twelve months Gas extraction, domestic rose 42.6%.

East coast gas extraction prices increased significantly in the June quarter 2022 due to elevated oil prices, and strong domestic demand

Domestic Gas Extraction

East coast gas extraction prices increased significantly in the June quarter 2022 due to elevated oil prices, and strong domestic demand

This map shows Domestic gas extraction quarterly price change.
West coast rose 2.9%
Domestic gas extraction for Western Australia increased over the quarter. The price rise is driven by spot price contracts and contract price escalation.
East coast rose 15.9%
Prices for East coast domestic gas extraction rose significantly over the quarter due to increase in international crude oil prices and strong demand for power generation and heating during winter.

Manufacturing

Input to the manufacturing industry

Input prices to the manufacturing industries rose 3.1%

Input prices to manufacturing rose 3.1% over the quarter and rose 17.7% over the past twelve months.

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

  • Metal ore mining to manufacturing (+2.4%), due to nickel supply shortages prompted by supply chain disruptions and Russia's invasion of Ukraine, and demand for gold continuing to increase.
  • Agriculture to manufacturing (+1.9%), due to a global oilseed and grain shortage with the conflict in Ukraine disrupting supplies.
  • Oil and gas extraction (+4.0%), due to an increase in global demand following the COVID19 lockdowns combined with supply concerns from the gradual implementation of sanctions against Russia.

There were no significant movements offsetting the input price rises.

Output of the manufacturing industry

Output prices of the manufacturing industries rose 5.1%

Output prices of the manufacturing industries rose 5.1% over the quarter and 18.1% over the past twelve months.

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

  • Petroleum refining and petroleum fuel manufacturing (+31.1%), due to a continuing global fuel shortage with trade sanctions against Russia disrupting supply.
  • Alumina production (+15.7%), due to rises in costs for bauxite, caustic soda and coal, combined with increased demand from China.
  • Copper, silver, lead and zinc smelting (+7.8%), due to tight zinc supply put under further pressure as high energy costs in Europe disrupts production.

Offsetting the rise, was a price fall in:

  • Aluminium smelting (-7.9%), coming off a strong increase in the March quarter and falling demand in China due to COVID lockdowns.

Services

Output of the services industries

Accommodation and food services prices rose, driven by: 

  • Accommodation services (+9.0%), due to the school holiday period and increased demand following the opening of international borders. Total overseas arrivals were at their highest levels since March 2020, combined with an increase in the number of sporting and cultural events during the quarter, placing further pressure on prices. Ongoing staff shortages has resulted in wage increases to incentivise and retain staff. 
  • Cafes, restaurants, and takeaway food services (+2.1%), due to wage increases and higher input costs.

Over the past twelve months:

  • Accommodation services prices rose 16.0%.
  • Cafes, restaurants, and takeaway food services prices rose 6.0%.

Transport, postal and warehousing prices rose, driven by:

  • Road freight transport (+4.1%), due to rising prices for fuel, wages and other input costs.
  • Postal and courier pick-up and delivery services (+3.6%), due to rising fuel costs.

This was partly offset by:

  • Airport operations and other air transport support services (-2.8%).

Over the past twelve months:

  • Road freight transport prices rose 8.3%.
  • Postal and courier pick-up and delivery services rose 8.1%.
  • Airport operations and other air transport support services fell 1.2%.

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

  • Non-residential property operators (+2.0%), due to a rise in industrial rents with limited supply of industrial spaces and continued growth in e-commerce.
  • Real estate services (+2.8%), due to continued growth in property prices.
  • Passenger car rental and hiring (+17.5%), due to continued supply chain pressures on inventory compounded by increased demand during school holidays.

Over the past twelve months:

  • Non-residential property operators rose 4.6%.
  • Real estate services prices rose 13.5%.
  • Passenger car rental and hiring prices rose 14.4%.

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

  • Engineering design and consulting services (+3.0%), due to ongoing high demand from the construction industry, and rising wages amid labour supply constraints.
  • Accounting services (+1.5%), due to high service demand for small-medium size accounting firms and shortages of qualified labour.

Over the past twelve months:

  • Engineering design and consulting services prices rose 7.8%.
  • Accounting services prices rose 3.5%.

Other Services industries rose, driven by:

  • Laundry and dry-cleaning services (+6.2%), due to increased freight, material, utility, and labour costs.
  • Hairdressing and beauty services (+1.4%), due to staff shortages and increased weekend penalty rates for casual workers.

Over the past twelve months:

  • Laundry and dry-cleaning services prices rose 8.7%.
  • Hairdressing and beauty services rose 4.6%.

Data downloads

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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

Manufacturing

Input to the manufacturing industry

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 

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.

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