Updated Inputs to Industry Producer Price Indexes

Notice

Effective with the release of Producer Price Index (PPI) data for January 2015 on February 18, 2015, the Bureau of Labor Statistics updated the weights used to calculate the PPI industry input indexes. BLS also applied improved methods to the industry input indexes and expanded the number of industries for which these indexes are calculated.

These updates resulted in several changes to table 14 of the PPI Detailed Report. That table previously only presented data for material and supply inputs to construction industries. Since 1986, BLS has published indexes for material and supply inputs to construction industries. In July 2014, BLS also began publishing experimental input indexes for the following industries:

  • Paint and coating manufacturing
  • Automobile manufacturing
  • Offices of health practitioners
  • Membership associations and organizations.

In January 2015, BLS started publication of additional input indexes for the following industries:

  • Plastics products manufacturing
  • Mining and oil and gas field machinery manufacturing
  • Airplane manufacturing
  • Ship building and repairing
  • Truck transportation

While BLS has always calculated the input indexes for these nine industries using the methods described in the next section of this article, beginning with January 2015 data, the input indexes for construction industries also reflect the new methodology.

Methodology and Weighting

Industry input indexes measure the average change in prices for domestic inputs consumed by industries; these indexes exclude capital investment and labor. BLS determines the products to include in an industry input index based on the Bureau of Economic Analysis (BEA) Use of Commodities by Industries table. This table provides, on an industry by industry basis, the set and dollar value of products that each domestic industry consumes during production. [1] BLS calculates weights for each commodity in an industry input index based on this table and revenue data from the U.S. Census Bureau. The gross weight of each commodity in an industry input index equals the share of the total commodity’s value consumed by the industry, multiplied by the Census revenue for that commodity. BLS then converts the gross weight to a net weight by removing the portion of the input commodity’s value that was produced by the industry. BLS uses the BEA Make of Commodities by Industries table to determine the portion of the commodity’s value that is produced by the industry.

Prior to the January 2015 PPI release, weights for industry input indexes were based on 2002 data from the BEA Input-Output Accounts and 2007 economic census data from the U.S. Census Bureau. BLS has updated to 2007 the portion of the industry input index weights derived from the BEA Input-Output Accounts. The portion of the weights derived from census data will continue to be based on 2007 information. [2]

Since 1986, BLS has calculated the input indexes for construction industries from industry-based primary product PPIs. These industry-based indexes approximated commodity-based producer price indexes. (Commodity indexes track price change for goods and services regardless of the industry of origin.) The industry input indexes for construction and all other industries now are calculated from commodity-based producer price indexes. It is more appropriate to use commodity indexes than industry indexes because industries consume commodities as inputs to production.

Also since 1986, the input indexes for construction industries only included goods. With the publication of January 2015 data, all industry input indexes include services and construction inputs, in addition to goods inputs.

Coverage and Publication Structure

As of January 2015, BLS publishes input indexes for the industries shown in Table 1.

The long-standing indexes for material and supply inputs to construction industries will remain intact. Titles and index codes have changed to conform to the new table structure. New indexes capture specific goods inputs, and overall and detailed services inputs. Appendix A provides a title and coding concordance between the historical inputs to construction industries indexes and their successor indexes within the updated table structure.

Availability

PPI industry input indexes data are available in table 14 of the PPI Detailed Report or through our data-retrieval tools. For help retrieving data or for additional information, email ppi-info@bls.gov or call the Division of Industrial Prices and Price Indexes, Section of Index Analysis and Public Information, at (202) 691-7705.


Table 1. Industries and industry grouping covered with PPI Input Indexes
Construction Industries Input Indexes

Inputs to construction industries, excluding capital investment, labor, and imports

Inputs to new construction industries, excluding capital investment, labor, and imports

Inputs to residential construction industries, excluding capital investment, labor, and imports

Inputs to single family residential construction, excluding capital investment, labor, and imports

Inputs to multifamily residential construction, excluding capital investment, labor, and imports

Inputs to other residential construction, excluding capital investment, labor, and imports

Inputs to nonresidential construction, excluding capital investment, labor, and imports

Inputs to commercial and healthcare structures, excluding capital investment, labor, and imports

Inputs to commercial structures, excluding capital investment, labor, and imports

Inputs to healthcare structures, excluding capital investment, labor, and imports

Inputs to industrial structures, excluding capital investment, labor, and imports

Inputs to other nonresidential construction, excluding capital investment, labor, and imports

Inputs to highways and streets, excluding capital investment, labor, and imports

Inputs to power and communication structures, excluding capital investment, labor, and imports

Inputs to educational and vocational structures, excluding capital investment, labor, and imports

Inputs to other misc. nonresidential construction, excluding capital investment, labor, and imports

Inputs to maintenance and repair construction, excluding capital investment, labor, and imports

Inputs to residential maintenance and repair, excluding capital investment, labor, and imports

Inputs to nonresidential maintenance and repair, excluding capital investment, labor, and imports

Goods Industries Input Indexes

Inputs to 325510, paint and coating manufacturing, excluding capital investment, labor, and imports

Inputs to 326100, plastics products manufacturing, excluding capital investment, labor, and imports

Inputs to 333130, mining and oil and gas field machinery manufacturing, excluding capital investment, labor, and imports

Inputs to 336111, automobile manufacturing, excluding capital investment, labor, and imports

Inputs to 336411, airplane manufacturing, excluding capital investment, labor, and imports

Inputs to 336611, ship building and repairing, excluding capital investment, labor, and imports

Services Industries Input Indexes

Inputs to 484000, truck transportation, excluding capital investment, labor, and imports

Inputs to 621A00, offices of health practitioners, excluding capital investment, labor, and imports

Inputs to 813000, membership associations and organizations, excluding capital investment, labor, and imports

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Appendix A. Previous and revised coding and publication structures for materials and supply inputs to construction industries
PRIOR
CODE
PRIOR
TITLE
NEW
CODE
NEW
TITLE
PCUBCON--BCON--

Inputs to construction industries

WPUIP2300001

Inputs to construction industries, goods

PCUBNEW--BNEW--

New construction

WPUIP2310001

Inputs to new construction, goods

PCUBRES--BRES--

Residential construction

WPUIP2311001

Inputs to residential construction, goods

PCUBNON--BNON--

Non-residential construction

WPUIP2312001

Inputs to nonresidential construction, goods

PCUBNCS--BNCS--

Commercial structures

WPUIP2312101

Inputs to commercial and healthcare structures construction, goods

PCUBNIS--BNIS--

Industrial structures

WPUIP2312201

Inputs to industrial structures construction, goods

PCUBONS--BONS--

Other nonresidential construction

WPUIP2312301

Inputs to other nonresidential construction, goods

PCUBMRP--BMRP--

Maintenance and repair

WPUIP2320001

Inputs to maintenance and repair construction, goods

PCUBMRS--BMRS--

Residential

WPUIP2321001

Inputs to residential maintenance and repair

PCUBMNR--BMNR--

Nonresidential

WPUIP2322001

Inputs to nonresidential maintenance and repair construction, goods

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Footnotes

[1] BLS uses a 0.5-percent cutoff rule for determining the products to include in an industry input index. Products that comprised less than 0.5 percent of the total inputs to the industry were excluded from the index. The 0.5-percent cutoff significantly reduces the work of building and maintaining the industry input indexes; research shows that the truncated inputs have almost no effect on index movements. BLS uses a similar 0.5-percent cutoff to construct the Final Demand-Intermediate Demand indexes.

[2] 2007 BEA Input-Output data, including both the Make and Use tables, are at http://www.bea.gov/industry/io_annual.htm.

 

Last Modified Date: February 18, 2015