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Statistical bulletin: Services Producer Price Indices, Quarter 3 2013 This product is designated as National Statistics

Released: 20 November 2013 Download PDF

Key Points

  • The net sector aggregate of selected SPPIs rose 0.3% in the 12 months to quarter 3 of 2013, compared with a rise of 0.6% in quarter 2 of 2013.
  • Between quarter 2 and quarter 3 of 2013 the net sector aggregate of selected SPPIs fell 0.1%.
  • The gross sector aggregate of selected SPPIs rose 0.2% in the 12 months to quarter 3 of 2013.
  • Between quarter 2 and quarter 3 of 2013 the gross sector aggregate of selected SPPIs fell 0.2%.

Summary of Services Producer Price Index

The Services Producer Price Index (SPPI), is constructed from a statutory quarterly survey which measures changes in the price received for selected services provided by UK businesses to other UK businesses and Government. Individual SPPIs are available which provide information on price change for a selection of service industries. These individual price indices are also aggregated together to create a service industry SPPI with limited coverage (it does not provide full coverage of the 'service sector').

At the aggregate level, there are two types of SPPI series produced, which are:

  • Net Sector Output (NSO) series:

The net sector series measures transactions between business services and other sectors excluding business services.

  • Gross Sector Output (GSO) series:

    The gross sector series measures transactions between business services and other sectors including business services.

The aggregate level SPPI is published on a NSO basis (unless otherwise stated).

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

Coverage of SPPI

ONS does not currently produce an SPPI for every industry in the services sector and so the SPPI aggregate is a partial, best estimate, of the overall inflation to UK businesses from the services sector. As resources allow, ONS will continue to review the existing SPPIs and expand coverage through developing SPPIs for new industries. As such, the SPPI aggregates will change composition from time to time but will always remain ONS’ best estimate of overall inflation to UK businesses from the services sector. The fact that coverage may change over time should be considered by users when deciding which indices best meet their needs.

A development project to increase the industrial coverage of the SPPI took place between 2009 and 2012 and has resulted in the development of seven new SPPIs. These are:

• Accountancy services;
• Legal services;
• Architecture and engineering services;
• Cargo handling services;
• Advertising Creation and Placement;
• Business and Management;
• Storage and Warehousing.

Since their development, these indices have been published as experimental series in a separate article, available here. In the next SPPI statistical bulletin, published on 26 February 2014, these series will no longer be published as experimental but will be added to the main statistical bulletin. This will change the composition of the aggregate SPPIs, increasing the coverage of the service industry and improving the measure.

Previous articles containing the results for these experimental indices can be found on the relevant section of the ONS website, and the final article will be published on Friday 22 November 2013.

Services Producer Price Index - Net Sector

In quarter 3 of 2013, movements in the net sector aggregate of selected services producer price index were as follows:

  • 12 month inflation rose 0.3%, compared with a rise of 0.6% in quarter 2 of 2013. The main upward contributions to the annual rate came from publishing services and freight forwarding. These increases were partially offset by downward contributions from property rentals and sorted materials recovery services.

  • Between quarter 2 and quarter 3 of 2013 the net sector aggregate services producer price index fell 0.1%. The main downward contributions were from sorted materials recovery services and freight transport by road but these were partially offset by increases in publishing services and freight forwarding.

Table A: Output Prices (Net Sector) - Aggregate SPPI

United Kingdom

Percentage change (not seasonally adjusted)1,2
    12 month   3 month
2011 Q3  2.3    0.0
  Q4  1.8    0.2
         
2012 Q1  1.5   0.3
  Q2 1.0   0.6
  Q3 1.2   0.2
  Q4  1.1    0.1
         
2013 Q1 1.2   0.3
  Q2  0.6    0.0
  Q3 0.3   -0.1

Table source: Office for National Statistics

Table notes:

  1. The aggregate SPPI is an aggregate of the individual industry level SPPIs published in this Statistical Bulletin. It does not provide full coverage of the service sector.

  2. Aggregate indices exclude Financial Intermediation (Banks)

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Figure A: Aggregate SPPI (Net Sector)

United Kingdom

Figure A: Aggregate SPPI (Net Sector)
Source: Services Producer Price Index (SPPI) - Office for National Statistics

Notes:

  1. The graph shows how the annual net sector aggregate SPPI inflation compares with the producer price index for all manufactured products.

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Notable industry movements and contributions to the net aggregate Services Producer Price Index - Three month change to Quarter 3 2013

Table B: Three month change to quarter 3 2013: Industry specific percentage change, latest quarter on previous quarter

United Kingdom

Percentage change
Sea & Coastal Water Freight 1.5
Publishing Services 1.0
Freight Forwarding 0.9
Business Airfares 0.9
Technical Testing 0.7
Construction Plant Hire -0.4
Courier Services -0.8
Employment Services -0.9
Freight Transport by Road -0.8
Sorted Materials Recovery Services -7.6

Table source: Office for National Statistics

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Figure B: Notable contributions to the net aggregate SPPI, latest quarter on previous quarter percentage change

United Kingdom

Figure B: Notable contributions to the net aggregate SPPI, latest quarter on previous quarter percentage change
Source: Services Producer Price Index (SPPI) - Office for National Statistics

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Notable industry movements and contributions to the net aggregate Services Producer Price Index - 12 month change to Quarter 3 2013

Table C: 12 month change to quarter 3 2013: Industry specific percentage change, latest quarter on corresponding quarter of previous year

United Kingdom

Percentage change
Publishing Services 4.4
Waste Disposal 2.9
Sewerage Services 2.4
Main/Motor Vehicles 2.1
Freight Forwarding 2.1
Property Rentals -1.0
Employment Services -1.4
Business Telecoms -4.1
Sorted Recovered Materials Services -9.5

Table source: Office for National Statistics

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Figure C: Notable contributions to the net aggregate SPPI, latest quarter on same quarter of previous year percentage change

United Kingdom

Figure C: Notable contributions to the net aggregate SPPI, latest quarter on same quarter of previous year percentage change
Source: Services Producer Price Index (SPPI) - Office for National Statistics

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Main contributions to the net aggregate Services Producer Price Index 12 month rate

The largest upward contributions to the net aggregate services producer price index over the past 12 months came from:

  • Publishing Services.

  • Freight forwarding.

  • Maintenance of Motor Vehicles.

These upward movements were partially offset by a downward contribution from Sorted Materials Recovery Services and Property Rentals.

Figure D: Publishing Services

United Kingdom

Figure D: Publishing Services
Source: Services Producer Price Index (SPPI) - Office for National Statistics

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Figure F: Freight Forwarding

United Kingdom

Figure F: Freight Forwarding
Source: Services Producer Price Index (SPPI) - Office for National Statistics

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Figure E: Maintenance and Repair of Motor Vehicles

United Kingdom

Figure E: Maintenance and Repair of Motor Vehicles
Source: Services Producer Price Index (SPPI) - Office for National Statistics

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Services Producer Price Index - Gross Sector

In quarter 3 of 2013, movements in the gross sector aggregate of selected services producer price index were as follows:

  • 12 month inflation rose 0.2%, compared with a rise of 0.3% to quarter 2 of 2013.

  • Between quarter 2 and quarter 3 of 2013 the gross sector aggregate services producer price index fell 0.2%, the same as between quarter 1 of 2013 and quarter 2 of 2013.

    Figure G: Aggregate SPPI (Net and Gross Sectors)

    United Kingdom

    Figure G: Aggregate SPPI (Net and Gross Sectors)
    Source: Services Producer Price Index (SPPI) - Office for National Statistics

    Notes:

    1. This graph depicts the aggregate SPPI annual percentage change for both the net and gross sector series.

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Background notes

  1. Improvements introduced

    From quarter 2 of 2013, ONS stopped producing the SPPI records within its statistical bulletin. These records are available separately on the ONS website. (68 Kb Excel sheet)

  2. Article about rebasing the PPI and SPPI onto 2010=100

    As previously announced, ONS has been taking forward the rebasing of PPI and SPPI onto a 2010=100 basis. SPPI will be published on the new basis for Q4 2013, available on 26 February 2014. An article outlining plans to rebase the PPI and SPPI, can be found on the ONS website. If you have any questions or queries regarding the impact of rebasing on SPPI data, please contact SPPI.        

  3. Re-assessment by the UK Statistics Authority

    SPPI is currently undergoing a routine re-assessment by the UK Statistics Authority against the Code of Practice for Official Statistics. This assessment will consider both the SPPIs included in this statistical bulletin and those experimental series published in the development article. If you have any feedback on SPPI that you would like to be considered as part of this assessment, please contact SPPI or Assessment.

  4. Quality and Methodology Information  

    A Quality and Methodology Information (QMI) paper for the SPPI describes, in detail, the intended uses of the statistics presented in this Statistical Bulletin, their general quality and the methods used to produce them.

  5. Relevance to users

    Index numbers shown in this Statistical Bulletin are on a net sector basis. These relate only to transactions between the corporate services sector and other sectors. Detailed tables also contain gross sector indices which include transactions within the corporate services sector.

    Indices relate to average prices per quarter. The full effect of a price change occurring within a quarter will only be reflected in the index for the following quarter. All index numbers exclude VAT and are not seasonally adjusted. Since SPPIs exclude VAT, they are not affected by the increase in the standard rate of VAT to 20% from 4 January 2011. SPPI inflation is the percentage change in the net sector index for the latest quarter compared with the corresponding quarter in the previous year. 

    A number of external data sources are currently used in the compilation of the SPPI. Details of these follow:

    • Property rental payments – Investment Property Databank (IPD)

    • Business telecommunications – Office of Communications (Ofcom)

    • Financial Intermediation (Banks) – Bank of England (BoE)

    • Sewerage services – Office of Water Services (Ofwat)

    • Business rail fares – Office of Rail Regulation (ORR)

    • National post parcels - Parcelforce

  6. Accuracy

    SPPI policy is to show significant revisions but to suppress minor changes to avoid unnecessary inconvenience to users. Indices for the most recent two quarters are regarded as provisional and can be changed as later data become available. The National Statistics website contains information on the SPPI revisions policy.  

    Every five years, services producer price indices are rebased, and their weights updated to reflect changes in the industry. The article referred to in background note 2, informs users about work underway to rebase SPPIs from a 2005=100 basis to a 2010=100 basis, and update the weights. SPPIs will move to a 2010=100 basis from autumn 2013. More information about the impact of rebasing will be published as the project progresses and will be drawn to users' attention in the regular 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 option). Users can download the complete release in a choice of zipped formats or view and download their own selections of individual series. 

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    © Crown copyright 2013.

    Next publication:

    26 February 2014

    Media contact:

    Tel:  Luke Croydon   +44 (0)845 6041858
    Emergency on-call    +44 (0)7867 906553
    E-mail:  media.relations@ons.gsi.gov.uk

    Statistical contact:

    Tel:  Kat Pegler on +44 (0) 1633 456468
    E-mail:  ppi@ons.gsi.gov.uk

    Business Prices Enquiries:

    Tel +44 (0) 1633 455941 or +44 (0) 1633 456628

     

  9. 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

    The United Kingdom Statistics Authority has designated these statistics as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Official Statistics.

    Designation can be broadly interpreted to mean that the statistics:

    • meet identified user needs;
    • are well explained and readily accessible;
    • are produced according to sound methods; and
    • are managed impartially and objectively in the public interest.

    Once statistics have been designated as National Statistics it is a statutory requirement that the Code of Practice shall continue to be observed.

Statistical contacts

Name Phone Department Email
Kat Pegler +44 (0)1633 456468 Prices ppi@ons.gsi.gov.uk
Get all the tables for this publication in the data section of this publication .
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