Statistical bulletin: Producer Price Index, November 2012

Key points

• In the year to November 2012 the output price index for home sales of manufactured products rose 2.2%, down from 2.6% last month.
• Between October and November the output index for home sales of manufactured products fell 0.2%, down from a rise of 0.2% between September and October.
• In the year to November 2012 the output price index excluding food, beverages, tobacco & petroleum rose 1.4 %, the same rate as last month.
• In the year to November 2012 the total input price index fell 0.3%, down from no movement last month.
• Between October and November the total input price index rose 0.1%, the same rate between September and October.

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 Prices Index (RPI), Consumer Prices Index (CPI) and Services Producer Prices 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 November 2012, movements in output prices for UK manufactured products were as follows:

• The output price index for home sales of manufactured products rose 2.2%, down from 2.6% last month.

• The output price index excluding food, beverages, tobacco & petroleum rose 1.4 %, the same rate as last month.

• The output price index excluding excise duty rose 1.9%, down from a rise of 2.3% last month.

Between October and November:

• The output index for home sales of manufactured products fell 0.2%, compared with a rise of 0.2% between September and October. The main downward contribution to the monthly price fall was from a 2.1% drop in petroleum products prices. This was slightly offset by a rise of 0.5% in the price of food products.

• The output price index excluding food, beverages, tobacco & petroleum had no movement compared with a rise of 0.1% between September and October.

  Presentation Table: Output prices (home sales)

  Percentage change (not seasonally adjusted)

  		All manufactured products		Excluding food, beverages, tobacco & petroleum		All manufactured products excluding duty
  		1 month	12 months	1 month	12 months	1 month	12 months
  2012	Jun	-0.6	2.0	-0.2	1.7	-0.6	1.7
  	Jul	0.1	1.8	-0.1	1.2	0.1	1.5
  	Aug	0.5	2.3	0.1	1.2	0.6	1.9
  	Sep	0.5	2.5	0.3	1.2	0.5	2.2
  	Oct	0.2	2.6	0.1	1.4	0.2	2.3
  	Nov	-0.2	2.2	0.0	1.4	-0.2	1.9

  Table source: Office for National Statistics

  Download table

  • XLS format
    (26 Kb)

Input prices: summary

In the year to November 2012, movements in input prices, that is the price of materials and fuels purchased by UK manufacturing industry were as follows:

• The total input price index fell 0.3%, compared with no movement in the year to October.

• The input price index for the manufacturing industry excluding the food, beverages, tobacco & petroleum industries fell 0.1%.

• The price of imported materials as a whole (including crude oil) fell 2.1%, the same rate as last month.

Between October and November:

• The total input price index rose 0.1%, the same rate as between September and October. The main upward contributions to the monthly price rise were from a 2.6% rise in fuels prices and a 1.0% rise in the price of imported chemicals. These were partially offset by a 1.6% fall in crude oil prices.

• In seasonally adjusted terms, the input price index for the manufacturing industry excluding the food, beverages, tobacco & petroleum industries rose 0.3% between October and November compared with a rise of 0.1% between September and October.

Presentation Table: Input prices

Percentage change

		Materials & fuels purchased		Excluding food, beverages, tobacco & petroleum industries
		1 month	12 months	1 month	12 month	1 month
		(NSA)1	(NSA)1	(NSA)1	(NSA)1	(SA)2
2012	June	-2.1	-2.2	-1.2	-0.3	-0.2
	Jul	0.2	-2.6	-0.3	-1.5	-0.3
	Aug	2.0	1.2	0.5	-0.5	1.0
	Sep	0.1	-0.8	0.5	-0.8	0.3
	Oct	0.1	0.0	0.3	-0.4	0.1
	Nov	0.1	-0.3	0.3	-0.1	0.3

Table source: Office for National Statistics

Table notes:

1. NSA: Not seasonally adjusted

2. SA: 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:

Presentation Table: 12 months change to November 2012

Product group	Percentage change
Food products	2.8
Tobacco & alcohol	8.2
Clothing, textiles & leather	2.1
Paper & printing	-0.6
Petroleum products	-0.1
Chemicals & pharmaceuticals	0.0
Metal, machinery & equipment	-0.4
Computer, electrical & optical	3.4
Transport equipment	0.8
Other manufactured products	2.5
All manufacturing	2.2

Table source: Office for National Statistics

Presentation Table: 1 month change to November 2012

Product group	Percentage change
Food products	0.5
Tobacco & alcohol	-0.1
Clothing, textiles & leather	0.0
Paper & printing	0.1
Petroleum products	-2.1
Chemicals & pharmaceuticals	0.3
Metal, machinery & equipment	-0.2
Computer, electrical & optical	0.1
Transport equipment	-0.1
Other manufactured products	-0.2
All manufacturing	-0.2

Table source: Office for National Statistics

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:

Presentation Table: 12 months change to November 2012

Product group	Percentage change
Fuel incl. CCL	4.5
Crude oil	-4.0
Home food materials	10.6
Imported food materials	5.8
Other home-prod. materials	-0.2
Imported metals	-7.8
Imported chemicals	-0.7
Imported parts & equipment	-1.3
Other imported materials	-1.3
All manufacturing	-0.3

Table source: Office for National Statistics

Presentation Table:1 month change to November 2012

Product group	Percentage change
Fuel incl. CCL	2.6
Crude oil	-1.6
Home food materials	0.6
Imported food materials	1.1
Other home-prod. materials	0.3
Imported metals	-1.2
Imported chemicals	1.0
Imported parts & equipment	0.1
Other imported materials	0.6
All manufacturing	0.1

Table source: Office for National Statistics

Notes for Input prices: detail

1. Input price indices include the Climate Change Levy which was introduced in June 2001.
2. Input price indices include the Aggregate Levy (13.9 Kb Pdf) which was introduced in June 2002.

Output prices: summary of statistics

The overall output price index rose 2.2% in the year to November 2012, compared with a rise of 2.6% in the year to October 2012. The output price index fell 0.2 % between October and November, compared with a rise of 0.2% between September and October. The main downward contribution to the monthly price change was from petroleum products. The main upward contribution, partially offsetting this, was from food products.

Petroleum products fell 2.1% between October and November with an annual decrease of 0.1% in the year to November. The monthly fall was due to a 2.1% fall in both unleaded petrol and diesel prices.

Food prices rose 0.5% between October and November and rose 2.8% in the year to November.  The monthly rise was mainly due to a 1.2% rise in other food product prices and a 1.1% rise in the price of dairy products.

Chemical and pharmaceutical product prices rose 0.3% between October and November but showed no overall price movement in the year to November.  The monthly rise is due to a 0.3% rise in the price of chemicals and chemical products.

Other manufactured products prices fell 0.2% between October and November and rose 2.5% in the year to November. The monthly fall was due to price falls across a broad range of product groups.

Output price index excluding food, beverages, tobacco & petroleum

The output price index for manufactured products excluding food, beverages, tobacco & petroleum rose 1.4% in the year to November, the same rate as last month. This index is not affected by changes in excise duty.

Input prices: summary of statistics

The overall input index fell 0.3% in the year to November 2012, compared with no movement in the year to October 2012. The input index for all manufacturing rose 0.1% between October and November, the rate has remained at this level for the past three months. The main downward contributions to the monthly fall in the price index were crude oil and imported metals. These were offset by rises across all other product groups, most notably an increase in the price of fuel (inc. CCL). 

The index for fuel (inc. CCL) rose 2.6% between October and November and rose 4.5% in the year to November. The monthly increase is due to 3.9% rise in the price of gas and 2.0% rise in the price of electricity including climate change levy.

The index for Crude oil fell 1.6% between October and November and fell 4.0% in the year to November 2012.

The index for imported metals fell 1.2% between October and November and fell 7.8% in the year to November. The monthly decrease was due to a fall of 5.3% in the price of other non-ferrous metals.

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

The index for materials and fuels purchased by manufacturing industries other than food, beverages, tobacco & petroleum industries in seasonally adjusted terms rose 0.3% between October and November. The unadjusted index also rose 0.3% between October and November, but fell 0.1% in the year to November.

Output prices: records for November 2012

All manufactured products

Annual rate rose 2.2%, compared with 2.5% for the year to October. Last lowest in July 2012 (1.8%). The monthly rate 0.2% is unchanged from last month. Last lower in June 2012 (-0.6%).

Excluding food, beverages, tobacco & petroleum

Annual rate 1.4%, unchanged from the year to October.  Last higher in June 2012 (1.7%). No movement for the month of November compared to a rise of 0.1% for October. Last lower in July 2012 (-0.1%).

All manufactured products excluding duty

Annual rate 1.9%, down from 2.3% last month. Last higher in October 2012 (2.3%). Monthly rate -0.2%, down from 0.2% last month. Last lower in June 2012 (0.1%).

Food products

Annual rate rose 2.8%, compared with 2.5% last month. Last higher in May 2012 (3.2%). Last lower in October 2012 (2.5%). Monthly rate rose 0.5%, compared with 0.3% last month. Last lower in October 2012 (0.3%).

Tobacco & alcohol (inc duty)

Annual rate rose 8.2%, compared with 8.8% last month. Last higher in October 2012 (8.8%). Monthly rate fell -0.1%, down from 0.5% last month. Last lower August 2011 (-0.4%). Last higher in October 2012 (0.5%).

Clothing, textiles & leather

Annual rate 2.1%, up from 2.0% last month. Also 2.1% in May 2012. Last lower in October 2012 (2.0%). No movement for November compared with 0.1% for October. Last lower in June 2012 (-0.2%).

Paper & printing

Annual rate fell -0.6%, up from -1.0% last month. Last higher in July 2012 (-0.5%). Monthly rate 0.1%, unchanged from last month. Last higher in April 2012 (0.2%).

Petroleum products

Annual rate fell -0.1%, down from 2.8% last month. Last lower in July 2012 (-2.4%). Monthly rate fell -2.1%, down from 0.5% last month. Last lower in June 2012 (-3.8%).

Chemical & pharmaceutical products

No movement to annual rate, up from -0.4% last month. Last higher in May 2012 (1.7%). Monthly rate 0.3%, an increase from the no movement last month. Last higher in September 2012 (0.8%). 

Metal, machinery & equipment nec

Annual rate -0.4%, down from 0.1% month. Last lower in December 2009 (-0.1%). Monthly rate -0.2%, up from -0.1% last month. Last lower in July 2009 (-0.3%).

Computer, electrical & optical equipment

Annual rate 3.4%, up from 3.2% last month. Also 3.4% in July. Last higher November 2010 (5.1%). Monthly rate 0.1%, unchanged from last month. Last higher in July 2012 (0.2%).

Transport

Annual rate 0.8%, up from 0.7% last month. Last higher in May 2012 (0.9%). Monthly rate -0.1%, down from 0.3% last month. Last higher in October 2012 (0.3%).

Other manufactured products

Annual rate 2.5%, down from 2.8% last month. Also 2.5% in June 2010. Last lower in May 2010 (2.1%).  Monthly rate -0.2%, down from 0.1% last month. Last higher in October 2012 (0.1%).

Input prices: records for November 2012

Materials & fuels purchased

Annual rate -0.3%, up from no movement last month. Last lower in September 2012 (-0.8%). Monthly rate 0.1%, unchanged from last three months. Last higher in August 2012 (2.0%).

Excluding food, beverages, tobacco & petroleum industries

Annual rate -0.1%, up from -0.4%. Also -0.1% in April 2007. Last higher in October 2012 (-0.4%). Monthly rate (seasonally adjusted) 0.3%, up from 0.1% last month. Last lower in October 2012 (0.1%).

Imported materials as a whole (including crude oil)

Annual rate fell -2.1%, no movement from last month. Last higher in August 2012 (-1.4%). Monthly rate -0.2%, down from -0.1% last month. Last higher in October 2012 (-0.1%).

Fuel including climate change levy

Annual rate 4.5%, down from 5.2% last month. Last lower in February 2011 (2.3%). Monthly rate 2.6%, up from 2.4% last month. Last higher in September 2012 (3.0%).

Crude oil

Annual rate -4.0%, down from -1.7% last month. Last higher in October 2012 (-1.7%). Monthly rate -1.6%, down from -0.8% last month. Last higher in October 2012 (-0.8%).

Home food materials

Annual rate 10.6%, down from 11.9% last month. Last higher in October 2012 (11.9%). Monthly rate 0.6%, up from -0.2% last month. Last higher in June 2012 (11.8%).

Imported food materials

Annual rate 5.8%, up from 4.1% for the last month. Last higher in December 2011 (6.6%). Monthly rate 1.1%, up from -0.4% last month. Last lower in June 2011 (1.2%).

Other home-produced materials

Annual rate -0.2%, up from -1.1% last month. Last lower in October 2012 (-1.1%). Monthly rate 0.3%, up from -0.1% last month. Last lower in October 2012 (-0.1%).

Imported metals 

Annual rate -7.8%, down from -7.4% last month. Last higher in October 2012 (-7.4%). Monthly rate -1.2%, down from -0.5% last month. Last lower in August 2012 (-1.8%).

Imported chemicals

Annual rate -0.7%, up from -2.2% last month.  Last higher in June 2012 (0.2%). Monthly rate 1.0%, up from 0.6% last month. Last higher in May 2011 (1.2%).

Imported parts & equipment

Annual rate rose 1.3%, up from -1.9% last month. Last higher in August 2012 (-1.2 %). Monthly rate 0.1%, up from 0.5% last month. Last higher in October 2012 (0.5%).

Other imported materials

Annual rate -1.3%, up from -2.3% last month. Last higher in August 2012 (-0.9%). Monthly rate 0.6%, up from 0.2% last month. Last higher in June 2012 (7.0%).

Revisions

(Tables 8R and 9R)

For this bulletin reference tables 8R and 9R (230 Kb Excel sheet) 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. The headline figures for input prices for September and October have upwards revisions and there are no revisions for headline output prices. These revisions were mainly caused by quality adjustments due to late data.

Presentation Table: 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: 12 months	2.2	-0.10	0.18
Total output: 1 month	-0.2	0.03	0.10
Total input: 12 months	-0.3	0.42*	0.70*
Total input: 1 month	0.1	0.15*	0.44*

Table source: Office for National Statistics

Table notes:

1. * Statistically significant.

Revisions to data provide one indication of the reliability of key indicators. The above table 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 presents a summary of the differences between the first estimates published between November 2006 and October 2011 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 October 2012 and the calculations behind the averages in the table are available in the reference table area of the ONS website;

Revision triangle for total output (12 months) (1.77 Mb Excel sheet)

Revision triangle for total output (1 month) (1.73 Mb Excel sheet)

Revision triangle for total input (12 months) (1.78 Mb Excel sheet)

Revision triangle for total input (1 month) (1.77 Mb Excel sheet)

Background notes

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

   An article outlining plans to rebase the producer prices index and services producer price index, at the end of 2013, can be found on the ONS website.

2. Quality and Methodology Information

   A Quality and Methodology Information (QMI) (109.5 Kb Pdf) paper for the PPI describes in detail the intended uses of the statistics presented in this publication, their general quality and the methods used to produce them.

3. 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 dependent on IPI.

   For further information on the changes and impact of the SIC 2007 on prices please see the Economic and Labour Market Review for December 2010 (84.1 Kb Pdf) .

   Any comments about this work and its impact on PPI please contact Producer Price Index Operations on +44 (0)1633 45 6628 or email PPI Operations. 

4. 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 (230 Kb Excel sheet) 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% from 4 January 2011.

   The detailed input indices of prices of materials and fuels purchased by industry (reference table 6 (230 Kb Excel sheet) ) 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.

5. 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.

6. 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 are re-estimated every month. A routine seasonal adjustment review is normally conducted in the Autumn each year.

   Every five years, producer price indices are rebased, and their weights updated to reflect changes in the industry. The article referred to in background note 1, informs users about work underway to rebase PPIs from a 2005=100 basis to a 2010=100 basis, and update the weights. PPIs 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.

   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 is available on the Producer Price Index: Pre-Release Access List. (21.9 Kb Pdf)

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9. 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.

   Next publication: 15 January 2013

   Media contact:

   Tel:  Luke Croydon or David Bradbury on 0845 6041858

   Emergency on-call: 07867 906553

   E-mail:  media.relations@ons.gsi.gov.uk

   Statistical contact:

   Tel:  Liam Murray on +44 (0)1633 455811

   E-mail: ppi@ons.gsi.gov.uk

   PPI/SPPI Enquiries:

   Tel +44 (0)1633 455901 or +44 (0)1633 455941

10. 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;
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    • 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
Liam Murray	+44 (0)1633 455811	Business Price Statistics, ONS	ppi@ons.gsi.gov.uk