Producer Prices

The Producer Price Index (PPI) is a monthly survey that measures the price changes of goods bought and sold by UK manufacturers. The PPI is conducted by the Office for National Statistics and provides a key measure of inflation, alongside other indicators such as the Retail Price Index (RPI) and Corporate Services Price Index (CSPI).

They work on the ‘basket of goods’ concept. A wide collection of representative products is selected and the prices of these fixed sets of goods are collected each month. The movements in these prices are weighted to reflect the relative importance of the products in a chosen year (known as the base year). These are then aggregated for various sectors of industry to give the required indices.

The output price indices measure change in the prices of goods produced by UK manufacturers (these are often called ‘factory gate prices’). The input price indices measure change in the prices of materials and fuels bought by UK manufacturers for processing. These are not limited to just those materials used in the final product, but also include what is required by the company in its normal day to day running.

Imported Price Indices (IPI’s) are a series of economic indicators that measure change in the prices of goods and raw materials imported into the UK. IPI’s are a key component of input price indices. Exported Price Indices (EPI’s) are a series of economic indicators that measure change in the prices of goods manufactured in the UK but destined for export markets.

An overall summary of materials, fuels and outputs of all manufactured products are released monthly in the PPI First Release, with a fuller series of prices available in the Business Monitor MM22 published approximately two weeks later. The results are also summarised in the publication Economic Trends. All this information is released via the National Statistics Website.