Updated Inputs to Industries PPIs : U.S. Bureau of Labor Statistics

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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