Statistical bulletin: Services Producer Price Index, Quarter 4 2011

Key Points

• Net sector aggregate of selected SPPIs 12 month inflation rose 1.7 per cent in the fourth quarter of 2011, compared with a rise of 2.3 per cent in the third quarter of 2011.
• Between the third and fourth quarter of 2011 net sector aggregate of selected SPPIs rose 0.1 per cent.
• Gross sector aggregate of selected SPPIs 12 month inflation rose 1.2 per cent in the fourth quarter of 2011, compared with a rise of 1.8 per cent in the third quarter of 2011.
• There was no movement in the gross sector aggregate of selected SPPIs between the third and fourth quarter of 2011.

Summary of Services Producer Price Index

The Services Producer Price Index (SPPI), formerly the Corporate Services Price Index (CSPI), is constructed from a statutory quarterly survey. The SPPIs are primarily a suite of individual price indices that provide information on price change for a limited range of service industries. Each SPPI captures quarterly changes in the price received for services provided by UK businesses to other UK businesses and Government. 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.

Services Producer Price Index - Net Sector

In the fourth quarter of 2011, movements in the net sector aggregate of selected services producer price index were as follows:

• 12 month inflation rose 1.7 per cent compared with a rise of 2.3 per cent in the third quarter of 2011. This is the lowest annual rate since the first quarter of 2010, when the index rose 1.6 per cent.

• Between the third and fourth quarter of 2011 the net sector aggregate services producer price index rose 0.1 per cent, mainly reflecting price increases in publishing services, advertising placement and freight forwarding. These increases were partially offset by price decreases in sorted recovered materials services and property rentals.

Output Prices (Net Sector) - Aggregate SPPI

United Kingdom

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)

Aggregate SPPI (Net Sector)

United Kingdom

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.

Download chart

• XLS format
  (26 Kb)

Notable industry movements and contributions to the net aggregate Services Producer Price Index - 3 month change to quarter 4 2011

3 month change to quarter 4 2011: Industry specific percentage change, latest quarter on previous quarter

United Kingdom

Table source: Office for National Statistics

Contributions to the net aggregate SPPI, latest quarter on previous quarter percentage change

United Kingdom

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

Download chart

• XLS format
  (24.5 Kb)

Notable industry movements and contributions to the net aggregate Services Producer Price Index - 12 month change to quarter 4 2011

12 month change to quarter 4 2011: Industry specific percentage change, latest quarter on corresponding quarter of previous year

United Kingdom

Table source: Office for National Statistics

Contribution to the net aggregate SPPI, latest quarter on same quarter of previous year percentage change

United Kingdom

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

Download chart

• XLS format
  (24.5 Kb)

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:

• Freight transport by road

• Publishing services

• Sewerage services

Other notable upward contributions to the 12 month change came from: advertising placement and maintenance & repair of motor vehicles.

These upward movements were partially offset by a downward contribution from freight forwarding. 

Freight Transport by Road

United Kingdom

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

Download chart

• XLS format
  (25 Kb)

Publishing Services

United Kingdom

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

Download chart

• XLS format
  (16.5 Kb)

Sewerage Services

United Kingdom

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

Download chart

• XLS format
  (17 Kb)

Freight Forwarding

United Kingdom

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

Download chart

• XLS format
  (17 Kb)

Services Producer Price Index - Gross Sector

In the fourth quarter of 2011, movements in the gross sector aggregate of selected services producer price index were as follows:

• 12 month inflation rose 1.2 per cent, compared with a rise of 1.8 per cent in the third quarter of 2011. This is the lowest annual rate since the fourth quarter of 2009, when the index rose 0.6 per cent.  

• There was no movement in the gross sector aggregate services producer price index between the third and fourth quarter of 2011, this compares with a decrease of 0.4 per cent between the second and third quarter of 2011.

Aggregate SPPI (Net and Gross Sectors)

United Kingdom

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.

Download chart

• XLS format
  (17.5 Kb)

 

Background notes

1. Response to MM17 User Consultation Document

   Following a change in requirements from key users, the Office for National Statistics conducted a user consultation regarding the continuation of the Price Index Numbers for Current Cost Accounting. A response to this consultation can be found on the About ONS area of the ONS website (28.8 Kb Pdf) .

2. SPPI Development

   A development project to increase the industrial coverage of the SPPI has been in place since 2009. Recently the project has focused on the following industries:

   • Legal Services

   • Architecture and Engineering

   • Accountancy

   • Cargo Handling

   An article summarising the findings from this recent stage of the project will be published on Friday 24th February 2012, this article will include experimental new price indices for these industries. The article will appear in the publications area of the Services Producer Price Index subtopic of the ONS website.

    

   Articles summarising the findings for quarters 2 and 3.

    

3. Link to Summary Quality Report

   A Summary Quality Report 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.

4. Implementation of SIC 2007 in ONS: Update on SPPI  

   Services Producer Prices has implemented the change to the Standard Industrial Classification 2007 (SIC 2007). The most significant change to SPPI involved the reclassification of ‘recovered secondary raw materials’ and ‘publishing’. These are no longer classified in the manufacturing sector, but are now classified under services.

    

   For further information on the changes and impact of the SIC 2007 on the SPPI please see the Economic and Labour Market Review for December 2010.

    

   Any comments about this work and its impact on the SPPI please contact:

   ppi@ons.gov.uk or sppi@ons.gov.uk

5. Sorted Recovered Materials Services

   The SPPI index for sorted recovered materials services (38.32) uses the measurement of price change for recovered material ‘products’ as a proxy. Under the SIC2007 project these recovered material products, along with publishing services, were reclassified out of the manufacturing industry and into SPPI.

6. Relevance to users

   On 10 May 2010, the UK Statistics Authority Assessment team accredited the Services Producer Price Indices (SPPI) as a new National Statistic. 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.

    

   Further information regarding the UK Statistics Authority assessment can be found on the Monitoring & Assessment area of the UK Statistics Authority website (Assessment Report 25).

    

   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 per cent 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

   •  

   Following a quality review by ONS in January 2007 a decision was made to withdraw the Banking SPPI from publication. As a result the index has been re-developed and was re-introduced in Q3 2008. Under the re-development, the quality of the data collection and processing has been improved and the number of products included in the index has increased. However, the new index is not regarded as proxy for all Financial Intermediation services within the Standard Industrial Classification (SIC) 64. It has not therefore been included in the aggregate SPPI. The services measured are classified to SIC 64.19/1 and are published as a separate index known as the “SPPI for Financial Intermediation (Banks)”.

7. 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.  

8. 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. 

9. Follow us on twitter and facebook

   View the latest ONS 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.

    © Crown copyright 2012.

    Next publication:  23 May 2012

    Media contact:

    Tel:  Luke Croydon   0845 6041858
    Emergency on-call    07867 906553
    E-mail:  media.relations@ons.gsi.gov.uk

    Statistical contact:

    Tel:  Liam Murray on 01633 455811
    E-mail:  liam.murray@ons.gsi.gov.uk

    Email:     ppi@ons.gov.uk

    PPI/SPPI Enquiries:

    Tel 01633 455165 or 01633 456628

11. 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