Skip to content

Statistical bulletin: Producer Price Index, August 2011 This product is designated as National Statistics

Released: 09 September 2011 Download PDF

Key points

  • In the year to August 2011 the output price index for home sales of manufactured products rose 6.1 per cent.
  • Between July and August the output index for home sales of manufactured products rose 0.1 per cent.
  • In the year to August 2011 the output price index excluding food, beverages, tobacco & petroleum rose 3.6 per cent.
  • In the year to August 2011 the total input price index rose by 16.2 per cent.
  • Between July and August the total input price index fell 1.9 per cent.

Producer Price Index

The Producer Price Index (PPI) is a monthly survey that measures the price changes of goods bought and sold by UK manufacturers and provides a key measure of inflation, alongside other indicators such as the Retail Price Index (RPI), Consumer Price Index (CPI) and Services Producer Price Index (SPPI). This Statistical Bulletin contains a comprehensive selection of data on input and output index series. It contains producer price indices of materials and fuels purchased and output of manufacturing industry by broad sector.

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 (IPIs) are a series of economic indicators that measure change in the prices of goods and raw materials imported into the UK. IPIs are a key component of input price indices.

Exported Price Indices (EPIs) are a series of economic indicators that measure change in the prices of goods manufactured in the UK but destined for export markets.

Output Prices: Summary

In the year to August 2011, movements in output prices for UK manufactured products were as follows:

  • The output price index for home sales of manufactured products rose 6.1 per cent, unchanged from last month.

  • The output price index excluding food, beverages, tobacco & petroleum rose 3.6 per cent, compared with a rise of 3.4 per cent last month.

  • The output price index excluding excise duty rose 6.2 per cent, unchanged from last month.

Between July and August:

  • The output price index for home sales of manufactured products rose 0.1 per cent, mainly reflecting price rises in chemical & pharmaceutical products and other manufactured products, which were partially offset by a fall in petroleum product prices.

Output prices (home sales)

Percentage change (not seasonally adjusted)
  All manufactured products  Excluding food, beverages, tobacco & petroleum  All manufactured products excluding duty
  12 months  1 month  12 months  1 month  12 months  1 month
2011 Mar 5.6 1.1 3.1 0.5 5.5 1.1
Apr 5.6 1.1 3.6 0.8 5.8 0.9
May 5.4 0.2 3.4 0.2 5.5 0.2
Jun 5.8 0.2 3.2 0.2 5.9 0.2
Jul 6.1 0.3 3.4 0.4 6.2 0.3
Aug 6.1 0.1 3.6 0.2 6.2 0.1

Table source: Office for National Statistics

Download table

Output prices

Output prices 12 months percentage change: materials & fuels purchased and excluding food, beverages, tobacco & petroleum industries
Source: Index Numbers of Producer Prices (PPI): Provision of Price Information - Office for National Statistics

Download chart

Input Prices: Summary

In the year to August 2011, movements in input prices1,2 of materials and fuels purchased by the UK manufacturing industry were as follows:

  • The total input price index rose by 16.2 per cent, compared to a rise of 18.3 per cent last month.

  • The input price index for the manufacturing industry excluding the food, beverages tobacco & petroleum industries rose 13.0 per cent, compared to a rise of 13.3 per cent last month.

Between July and August:

  • The total input price index fell 1.9 per cent, mainly reflecting price falls in crude oil, home produced food and other imported parts & equipment.

  • Seasonally adjusted, the input price index for the manufacturing industry excluding the food, beverages tobacco & petroleum industries rose 0.3 per cent.

  • The price of imported materials as a whole (including crude oil) fell 1.6 per cent between July and August.

Input prices

Percentage change
  Materials & fuels purchased  Excluding food, beverages, tobacco & petroleum industries
  12 months  1 month  12 months  1 month  1 month
     (NSA)  (NSA)  (NSA)  (NSA)  (SA)
2011 Mar 14.8 3.8 10.3 2.1 1.2
Apr 17.9 2.8 12.2 1.3 1.9
May 16.3 -1.6 11.4 0.0 -0.2
Jun 16.8 0.1 12.6 0.2 1.0
Jul 18.3 0.5 13.3 1.0 0.8
Aug 16.2 -1.9 13.0 -0.6 0.3

Table source: Office for National Statistics

Table notes:

  1. NSA/SA: not/seasonally adjusted

    These indices include the Climate Change Levy which was introduced in June 2001

    These indices include the Aggregates Levy which was introduced in June 2002

Download table

Input prices (materials & fuel) manufacturing industry

Input prices (materials & fuel) purchased and excluding food, beverages, tobacco & petroleum industries: 12 months percentage change
Source: Index Numbers of Producer Prices (PPI): Provision of Price Information - Office for National Statistics

Download chart

Notes for Input Prices: Summary

  1. These indices include the Climate Change Levy which was introduced in June 2001.

  2. These indices include the Aggregate Levy which was introduced in June 2002.

  3. NSA/SA: not/seasonally adjusted

Output Prices: Detail

The contributions to movements in the total output index by the main product groups over the last year and month (not seasonally adjusted) are:

12 month change to August 2011

Product group Percentage change
Food products 8.8
Tobacco & alcohol 6.4
Clothing, textiles & leather 5.3
Paper & printing 5.3
Petroleum products 17.5
Chemicals & pharmaceuticals 7.4
Metal, machinery & equipment 3.7
Computer, electrical & optical -0.9
Transport equipment 1.7
Other manufactured products 3.6
All manufacturing 6.1

Table source: Office for National Statistics

Download table

1 month change to August 2011

Product group Percentage change
Food products 0.0
Tobacco & alcohol 0.0
Clothing, textiles & leather 0.0
Paper & printing 0.0
Petroleum products -0.6
Chemicals & pharmaceuticals 1.0
Metal, machinery & equipment 0.0
Computer, electrical & optical 0.1
Transport equipment -0.2
Other manufactured products 0.2
All manufacturing 0.1

Table source: Office for National Statistics

Download table

Contribution to 12 months percentage change in total (6.1%)

Contribution to 12 months percentage change in total (6.1%)
Source: Index Numbers of Producer Prices (PPI): Provision of Price Information - Office for National Statistics

Download chart

Contribution to 1 month percentage change in total (0.1%)

Contribution to 1 month percentage change in total (0.1%)
Source: Index Numbers of Producer Prices (PPI): Provision of Price Information - Office for National Statistics

Download chart

Input Prices: Detail

The contributions to movements in the total input index by the main commodities over the year and month (not seasonally adjusted) are:

12 month change to August 2011

Product group Percentage change
Fuel incl. CCL 7.7
Crude oil  35.7
Home food materials 5.8
Imported food materials 13.8
Other home-prod. materials 3.3
Imported metals 21.2
Imported chemicals 11.2
Imported parts & equipment 7.7
Other imported materials 13.9
All manufacturing 16.2

Table source: Office for National Statistics

Download table

1 month change to August 2011

Product group Percentage change
Fuel incl. CCL -0.8
Crude oil  -5.9
Home food materials -1.1
Imported food materials 0.0
Other home-prod. materials 0.0
Imported metals -0.7
Imported chemicals 0.6
Imported parts & equipment -0.6
Other imported materials 0.5
All manufacturing -1.9

Table source: Office for National Statistics

Download table

Contribution to 12 months percentage change in total (16.2%)

Contribution to 12 months percentage change in total (16.2%)
Source: Index Numbers of Producer Prices (PPI): Provision of Price Information - Office for National Statistics

Download chart

Contribution to 1 month percentage change in total (-1.9%)

Contribution to 1 month percentage change in total (-1.9%)
Source: Index Numbers of Producer Prices (PPI): Provision of Price Information - Office for National Statistics

Download chart

Output Prices: Summary Of Statistics

The overall output price index rose 6.1 per cent in the year to August, unchanged from July. This is the highest annual rate since October 2008 when the index rose 6.6 per cent. The index rose 0.1 per cent between July and August, mainly reflecting price rises in chemical & pharmaceutical products and other manufactured products, which were partially offset by a fall in petroleum product prices. Between July and August 2010 the index rose 0.1 per cent.

Chemical & pharmaceutical product prices rose 1.0 per cent between July and August and rose 7.4 per cent in the year to August. The monthly rise was mainly due to a 1.7 per cent increase in the price of other organic basic chemicals and a 2.0 per cent increase in pharmaceutical preparations.

Other manufactured product prices rose 0.2 per cent between July and August and rose 3.6 per cent in the year to August. This is the highest annual rate since April 2009 when the index rose 4.0 per cent. The monthly rise was mainly due to a 1.7 per cent increase in the price of jewellary, bijouterie & related articles and a 0.2 per cent increase in the price of rubber & plastic products.

Petroleum product prices fell 0.6 per cent between July and August and rose 17.5 per cent in the year to August. The monthly fall was mainly due to a 2.0 per cent decrease in the price of diesel and gas oil.

Apart from transport equipment and paper & printing products all other product groups recorded price rises in the month of August.

Output price index excluding food, beverages, tobacco & petroleum

The output price index for manufactured products excluding food, beverages, tobacco & petroleum rose 3.6 per cent in the year to August, compared with a rise of 3.4 per cent in the year to July. This index is not affected by changes in excise duty. The index rose 0.2 per cent between July and August compared with no movement between July and August 2010.

Output price index excluding excise duty

This index rose 6.2 per cent in the year to August, unchanged from July. The index excluding excise duty rose 0.1 per cent between July and August, compared with a rise of 0.1 per cent between July and August 2010.

Input Prices: Summary Of Statistics

The overall input index rose 16.2 per cent in the year to August, compared with a rise of 18.3 per cent in the year to July. This is the lowest annual rate since March 2011 when the index rose 14.8 per cent.

The input index for all manufacturing fell 1.9 per cent between July and August compared with a fall of 0.1 per cent between July and August 2010. This is the largest monthly fall since April 2009 when the index fell 2.0 per cent. The monthly fall in the input index between July and August mainly reflected price falls in crude oil, home produced food and other imported parts & equipment; these were partially offset by a rise in imported chemicals.

Crude oil prices fell 5.9 per cent between July and August and rose 35.7 per cent in the year to August.

Home produced food prices fell 1.1 per cent between July and August and rose 5.8 per cent in the year to August. The monthly fall was mainly due to widespread decreases across a range of products, including a 3.5 per cent fall in the price of home produced cereals, most notably home produced wheat, and a 4.2 per cent fall in home produced fresh vegetables.

Other imported parts & equipment product prices fell 0.6 per cent between July and August and rose 7.7 per cent in the year to August. The monthly fall was mainly due to widespread decreases across a broad range of products, most notably a 1.4 per cent decrease in both imported electronic components & boards and computers & peripheral equipment.

Imported chemical prices rose 0.6 per cent between July and August and rose 11.2 per cent in the year to August. The monthly rise was mainly due to a 8.7 per cent increase in the price of imported industrial gases, other inorganic basic chemicals, fertilisers & nitrogen compounds.

Imported chemicals and other imported materials were the only input product groups to record price rises in August.

Input price index excluding the food, beverages, tobacco & petroleum industries

The index for materials and fuels purchased by manufacturing industry excluding the food, beverages, tobacco & petroleum industries rose 0.3 per cent in seasonally adjusted terms between July and August. The unadjusted index rose 13.0 per cent in the year to August, compared with a rise of 13.3 per cent in the year to July.

Output Prices: Records

All manufactured products

Annual rate 6.1%, unchanged from last month. Last higher in October 2008 (6.6%). Monthly rate 0.1% down from 0.3% last month. Last lower in September 2010 (0.0%).

Excluding food, beverages, tobacco & petroleum

Annual rate 3.6%, up from 3.4% last month. Also 3.6% in April 2011. Last higher in August 2010 (3.7%). Monthly rate 0.2% down from 0.4% last month.

All manufactured products excluding duty

Annual rate 6.2%, unchanged from last month. Last higher in October 2008 (6.9%). Monthly rate 0.1% down from 0.3% last month. Last lower in September 2010 (0.0%)

Food products

Annual rate 8.8%, down from 9.2% last month. Last lower in May 2011 (8.1%). Monthly rate 0.0% down from 0.6% last month. Last lower in September 2010 (-0.2%).

Tobacco & alcohol (inc duty)

Annual rate 6.4%, unchanged from last month. Last higher in July 2009 (6.8%). Monthly rate 0.0% down from 0.1% last month. Last lower in December 2010 (-0.2%).

Clothing, textiles & leather

Annual rate 5.3%, unchanged from last month. This is the highest annual rate since records began (January 1997). Monthly rate 0.0% down from 0.6% last month. Also 0.0% in November 2010. Last lower in October 2010 (-0.1%).

Paper & printing

Annual rate 5.3%, down from 5.6% last month. Monthly rate 0.0% down from 0.4% last month. Also 0.0% in September and November 2010 and January 2010. Last lower in August 2009 (-0.5%).

Petroleum products

Annual rate 17.5%, down from 17.6% last month. Monthly rate -0.6% down from 0.2% last month. Last lower in May 2011 (-0.7%).

Chemical & pharmaceutical products

Annual rate 7.4%, up from 6.5% last month. Last higher in April 2011 (7.6%). Monthly rate 1.0% up from 0.4% last month. Last higher in April 2011 (1.9%).

Metal, machinery & equipment nec

Annual rate 3.7%, down from 4.0% last month. Also 3.7% in May and June 2011. Last lower in May 2010 (3.3%). Monthly rate 0.0%, down from 0.6% last month. Also 0.0% in August 2009. Last lower in July 2009 (-0.3%).

Computer, electrical & optical equipment

Annual rate -0.9%, up from -1.2% last month. Monthly rate 0.1% up from 0.0% last month. Last higher in January 2011 (0.6%).

Transport equipment

Annual rate 1.7%, down from 1.8% last month. Monthly rate -0.2% down from 0.3% last month. Last lower in January 2011 (-0.3%).

Other manufactured products

Annual rate 3.6%, up from 3.4% last month. Last higher in April 2009 (4.0%). Monthly rate 0.2% down from 0.3% last month. Also 0.2% in November and December 2010. Last lower in September 2010 (0.1%).

Input Prices: Records

Materials & fuels purchased

Annual rate 16.2%, down from 18.3% last month. Last lower in March 2011 (14.8%). Monthly rate -1.9% down from 0.5% last month. Last lower in April 2009 (-2.0%).

Excluding food, beverages, tobacco & petroleum industries

Annual rate 13.0%, down from 13.3% last month. Monthly rate (seasonally adjusted) 0.3% down from 0.8% last month. Last lower in May 2011 (-0.2%).

Fuel including climate change levy

Annual rate 7.7%, down from 7.9% last month. Last lower in March 2011 (4.9%). Monthly rate -0.8% down from 0.7% last month. Also -0.8% in April 2011. Last lower in February 2011 (-1.0%).

Crude oil

Annual rate 35.7%, down from 44.8% last month. Last lower in March 2011 (34.5%). Monthly rate -5.9% down from 1.2% last month. Last lower in May 2011 (-7.2%).

Home food materials

Annual rate 5.8%, down from 9.5% last month. Last lower in July 2010 (4.5%).  Monthly rate -1.1% up from -4.8% last month. Last higher in May 2011 (1.7%).

Imported food materials

Annual rate 13.8%, up from 13.7% last month. Last higher in March 2009 (14.4%). Monthly rate 0.0% down from 0.5% last month. Last lower in August 2010 (-0.1%).

Other home-produced materials

Annual rate 3.3%, up from 2.7% last month. Monthly rate 0.0% up from -0.1% last month. Last higher in May 2011 (1.1%).

Imported metals

Annual rate 21.2%, down from 22.9% last month. Monthly rate -0.7% down from 1.4% last month. Also -0.7% in June 2011. Last lower in July 2010 (-1.9%).

Imported chemicals

Annual rate 11.2%, unchanged from last month. Also 11.2% in May 2011. Last lower in March 2011 (9.7%). Monthly rate 0.6% up from -0.1% last month. Last higher in May 2011 (1.2%).

Imported parts & equipment

Annual rate 7.7%, up from 6.6% last month. Last higher in April 2009 (8.5%). Monthly rate -0.6% down from 0.9% last month. Last lower in August 2010 (-1.6%).

Other imported materials

Annual rate 13.9%, up from 12.1% last month. Last higher in December 2008 (16.7%). Monthly rate 0.5% down from 3.7% last month. Last lower in February 2011 (-0.1%).

Revisions

For this bulletin Reference Tables 8R and 9R highlight revisions to movements in price indices previously published in last month’s Statistical Bulletin. These are mainly caused by changes to the most recent estimates, as more price quotes are received, and revisions to seasonal adjustment factors, which are re-estimated every month.

Background notes

  1. Summary Quality Report

    A Summary Quality Report for the PPI (95.6 Kb Pdf) can be found on the ONS website. This report describes in detail the intended uses of the statistics presented in this publication, their general quality and the methods used to produce them.

  2. Producer Price Index And Services Producer Prices: Implementation Of SIC 2007

    Producer Prices has implemented the change to the Standard Industrial Classification 2007 (SIC 2007). The most significant change to PPI output prices involves the reclassification of ‘recovered secondary raw materials’ and ‘publishing’. These are no longer classified in the manufacturing sector, but are classified under services. In addition to this, a new SIC division, ‘repair, installation and maintenance of machinery and equipment’ has been created. Under SIC 2003 these activities were classified within the output of manufacturing, but as part of the specific industries where this activity took place.

    Fundamental changes have been made to the classification of the PPI Trade surveys, Import Price indices (IPI) and Export Price Indices (EPI). As part of the reclassification project the classification of these trade surveys have become compliant with Eurostat’s Short Term Statistics Regulation. The collection of IPI and EPI will now be on an SIC basis, a switch from the Standard International Trade Classification (SITC) and Combined Nomenclature (CN) previously used. PPI input prices are heavily dependant on IPI.

    Further information on the changes and impact of the SIC 2007 on prices (84.1 Kb Pdf) can be found on the ONS website.

    Any comments about this work and its impact on PPI please contact ppi@ons.gsi.gov.uk

  3. Relevance To Users

    Index numbers shown in the main text of this bulletin are on a net sector basis. The index for any sector relates only to transactions between that sector and other sectors, sales and purchases within sectors are excluded. However, the more detailed figures shown in reference tables 4 and 6 are on a gross basis; that is, intra industry sales and purchases are included in each of these indices.

    Indices relate to average prices for a month. The full effect of a price change occurring part way through any month will only be reflected in the following month’s index.

    All index numbers exclude VAT. Excise duty (on cigarettes, manufactured tobacco, alcoholic liquor and petroleum products) are included, except where labelled otherwise. Since PPIs exclude VAT, they are not affected by the increase in the standard rate of VAT to 20 per cent from 4 January 2011.

    The detailed input indices of prices of materials and fuels purchased by industry (Reference Table 6) do not include the climate change levy (CCL). This is because each industry can, in practice, pay its own rate for the various forms of energy, depending on the various negotiated discounts and exemptions that apply.

  4. Common Pitfalls In Interpreting Series

    Expectations of accuracy and reliability in sample surveys are often too high. Revisions and sampling variability are inevitable consequences of the trade off between timeliness, accuracy and the burden on respondents. Details of sampling variability are included elsewhere in this bulletin.

    Very few statistical revisions arise as a result of ‘errors’ in the popular sense of the word. All estimates, by definition, are subject to statistical ‘error’ but, in this context, the word refers to the uncertainty in any process or calculation that uses sampling, estimation or modelling. Most revisions reflect either the adoption of new statistical techniques or the incorporation of new information which allows the statistical error of previous estimates to be reduced. Only rarely are there avoidable ‘errors’ such as human or system failures, and such mistakes are made quite clear when they are discovered and corrected.

  5. Accuracy

    Figures for the latest two months are provisional and the latest five months are subject to revisions in light of (a) late and revised respondent data and (b), for the seasonally adjusted series, revisions to seasonal adjustment factors which are re-estimated every month. A routine seasonal adjustment review is normally conducted in the autumn annually. There are no planned methodological changes in the next 12 months.

  6. Revisions

    Revisions between first publication and estimates twelve months later

    Percentages
      Revisions between first publication and estimates twelve months later
             Value in last period Average over the last 5 years Average over the last 5 years without regard to sign (average absolute revision)
    Total output (JVZ7) - 12 months 6.1 -0.10 0.15
    Total output (JVZ7) - 1 month 0.1 0.03 0.09
    Total output (K646) - 12 months 16.2 0.43* 0.72*
    Total output (K646) - 1 month -1.9 0.16* 0.48*

    Table source: Office for National Statistics

    Table notes:

    1. * Statistically significant

    Download table

    Revisions to data provide one indication of the reliability of key indicators. The table above shows summary information on the size and direction of the revisions which have been made to the data covering a five year period. A statistical test has been applied to the average revision to find out if it is statistically significantly different from zero. An asterisk (*) shows that the test is significant.

    The table below presents a summary of the differences between the first estimates published between August 2005 and July 2010 and the estimates published 12 months later. These numbers include the effect of the reclassification onto SIC 2007.

    Spreadsheets giving revisions triangles of estimates for all months from January 1998 through to July 2011 and the calculations behind the averages in the table are available in the Reference Table area of this Statistical Bulletin.

  7. Publication Policy

    The complete run of data in the tables of this bulletin are also available to view and download in other electronic formats free of charge using the Office for National Statistics Datasets and Reference Table service (if you want the data associated with this bulletin click into "Download data in this release"). Users can download the complete release in a choice of zipped formats or view and download their own selections of individual series. The Datasets and Reference Tables service can be accessed on the ONS website.

    Details of the policy governing the release of new data are available from the Media Relations Office. A list of the names of those given pre-publication access to the contents of this bulletin (25.4 Kb Pdf) is available on the ONS website. In the light of the timing of the Monetary Policy Committee (MPC) meeting, the PPI is provided to the Bank of England at 8.30am on Thursday in line with release protocols.

  8. Copyright and reproduction

    © Crown copyright 2011

    Under the terms of the Open Government Licence and UK Government Licensing Framework, anyone wishing to use or re-use ONS material, whether commercially or privately, may do so freely without a specific application for a licence, subject to the conditions of the OGL and the Framework.

    For further information, contact the Office of Public Sector Information, Crown Copyright Licensing and Public Sector Information, Kew, Richmond, Surrey, TW9 4DU.

    Tel: +44 (0)20 8876 3444

    Email psi@nationalarchives.gsi.gov.uk

  9. Follow ONS on Twitter or Facebook or view our podcasts on YouTube.

  10. National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference.

  11. Media Contact Details

    Telephone: 0845 604 1858

    Email: media.relations@ons.gsi.gov.uk

  12. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

    These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.

Statistical contacts

Name Phone Department Email
Kevin Buckthought +44 (0)1633 456628 Prices ppi@ons.gsi.gov.uk
Get all the tables for this publication in the data section of this publication .
Content from the Office for National Statistics.
© Crown Copyright applies unless otherwise stated.