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Producer price indices: documentation of statistics
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Basic data of the statistics
Data description
The producer price indices for manufactured products measure development of the prices of products and idustrial services produced by enterprises. So, producer price indices depict inflation from the viewpoint of enterprises. Producer price indices belong to short term business statistics that describe the short-term development in various factors and areas of economy. For calculations of the producer price indices, data are collected from the data supplier enterprises on the prices of their products and industrial services. The data to be inquired can be either import, export or domestic market price.
Five different indices are produced under the producer price indices for manufacturing: Producer Price Index for Manufactured Products, Export Price Index, Import Price Index, Basic Price Index for Domestic Supply, and Basic Price Index for Domestic Supply, Including Taxes (formerly Wholesale Price Index).
Five different indices are produced under the producer price indices for manufacturing: Producer Price Index for Manufactured Products, Export Price Index, Import Price Index, Basic Price Index for Domestic Supply, and Basic Price Index for Domestic Supply, Including Taxes (formerly Wholesale Price Index).
Statistical population
The basic population of the producer price indices is formed by all enterprises operating in Finland that manufacture, export or import products or industrial services belonging to main categories A to F of the CPA 2015 product classification.
Producer price indices are compiled on product basis. Producer price indices for manufactured products describe development in the prices of goods and services in primary and secondary production. The indices are product-based, so the main industry of the enterprises producing products and services is irrelevant. If a service enterprise also produces goods, its goods production is excluded from the scope of the description of the Producer Price Index for Services. On the other hand, an enterprise that mainly produces industrial goods may also produce other services than industrial services, in which case for these services, the enterprise belongs to the scope of the description of the Producer Price Index for Services.
Producer price indices are compiled on product basis. Producer price indices for manufactured products describe development in the prices of goods and services in primary and secondary production. The indices are product-based, so the main industry of the enterprises producing products and services is irrelevant. If a service enterprise also produces goods, its goods production is excluded from the scope of the description of the Producer Price Index for Services. On the other hand, an enterprise that mainly produces industrial goods may also produce other services than industrial services, in which case for these services, the enterprise belongs to the scope of the description of the Producer Price Index for Services.
Statistical unit
Statistical unit is KAU, i.e kind-of-activity unit,
Unit of measure
The data of the producer price indices are published as index point figures. In addition, change percentages calculated on the basis of indices are published.
Base period
Base period is year 2015 (2015=100).
Reference period
Reference period is month.
The producer price indices for manufactured products are published monthly on the 24th day of the month following the statistical reference month or on the first working day following it. As an exception to this rule, the statistics for January is published on the 26th or on the first working day following it due to changes to the weight structure of the index, and the statistics for November is released on the last weekday preceding 24 December.
The producer price indices for manufactured products are published monthly on the 24th day of the month following the statistical reference month or on the first working day following it. As an exception to this rule, the statistics for January is published on the 26th or on the first working day following it due to changes to the weight structure of the index, and the statistics for November is released on the last weekday preceding 24 December.
Reference area
The geographical coverage is the whole country.
Sector coverage
The Producer Price Index for Manufactured Products covers the commodities in industries B-E, ranging from minerals to water and waste management services.
The Export Price Index covers categories A-E, that is, commodities ranging from agricultural products to water and waste management services.
The Import Price Index covers categories A-E, that is, commodities ranging from agricultural products to water and waste manage-ment services.
The Basic Price Index for Domestic Supply covers the commodities in industries A to F, from agricultural products to construction. The Basic Price Index for Domestic Supply, Including Taxes covers the commodities in industries A to F, from agricultural products to construction.
The Export Price Index covers categories A-E, that is, commodities ranging from agricultural products to water and waste management services.
The Import Price Index covers categories A-E, that is, commodities ranging from agricultural products to water and waste manage-ment services.
The Basic Price Index for Domestic Supply covers the commodities in industries A to F, from agricultural products to construction. The Basic Price Index for Domestic Supply, Including Taxes covers the commodities in industries A to F, from agricultural products to construction.
Time coverage
Time series for the new 2015=100 indices are available starting from index data for January 1995 (however, for the years 1995 to 2009 only at the 2-digit level and without the division of the Producer Price Index for Manufactured Products into domestic and export goods and the division of the Basic Price Index for Domestic Supply and the Basic Price Index for Domestic Supply, Including Taxes into domestic and imported goods). Regarding old indices, 2010=100 and 2005=100 series are produced for the time being, without the division of the Producer Price Index for Manufactured Products into domestic and export goods and the division of the Basic Price Index for Domestic Supply and the Basic Price Index for Domestic Supply, Including Taxes into domestic and im-ported goods. 2010=100 indices, however, include the above-mentioned division starting from 2010. All publishable point figures are produced from the 1949=100 series.
Frequency of dissemination
Producer price indices are published monthly on the statistics homepage. Producer price indices are not revised after publishing.
Concepts
Annual change
Annual change is the relative change of the index in comparison with the corresponding time period one year ago (e.g. annual change of total index of consumer prices, i.e. inflation).
Base index
In the base index the price of the calculation period is always compared with the base period. In the base index weights are usually changed less often than yearly, for example, at intervals of five years.
Basic price index for domestic supply
The basic price index for domestic supply measures development in the prices of goods used in Finland as they enter the market. The index includes both domestic and imported goods. The price for domestic goods is the factory price exclusive of taxes. The price for imported goods is the c.i.f. price of the imports plus customs duties. The index covers commodities classified under industry categories A to F.
CIF price
The price inclusive of cost, insurance and freight. The seller pays the sea freight to the agreed port of destination and takes out marine insurance for the goods in the buyer's favour.
Chain index
In the chain index the comparison takes place always between successive calculation periods. In the chain index the change in two calculation periods is used to take forward the index point figure of the desired base period. In the chain index the weights are changed in principle in each calculation period.
At times the chain index is also mentioned in such cases where the comparison period is retained fixed in comparisons within the year, but the comparison period and the weight structure of the index is changed whenever the year changes.
At times the chain index is also mentioned in such cases where the comparison period is retained fixed in comparisons within the year, but the comparison period and the weight structure of the index is changed whenever the year changes.
Export price index
The export price index measures development in the f.o.b. prices of export goods. Foreign-currency export prices are converted to euro using the mean rate for the statistical reference month. The index covers commodities of industry categories A to E.
FOB price
Price free on board a vessel. Value of goods at basic price inclusive of transport and delivery to the designated border location and possible taxes on export goods less subsidies.
Import price index
The import price index measures development in the c.i.f. prices of imported goods. Foreign-currency import prices are converted to euro using the mean rate for the statistical reference month. The index covers commodities classified under industry categories A to E.
Index
An index is a ratio describing the relative change in a variable (e.g. price, volume or value) compared to a certain base period (e.g. one year). The index point figure for each point in time tells what percentage the given examined variable is of its respective value or volume at the base point in time. The mean of the index point figures for the base period is 100.
Index formula
Index formula is a mathematical function by means of which an individual key figure describing change is calculated from observation values (e.g. Fischer, Laspeyres and Paasche index formulas).
Monthly change
Monthly change is the relative change in the index from a time period one month earlier. The change is usually expressed as a percentage.
Point figure
Point figure is a change quantity used in price indices, which expresses the price, average price or index of the comparison period relative to the price, average price or index of the base period. The point figure of the base period is usually denoted by the number hundred. For example, if the point figure for a commodity at a certain point in time is 105.3, it means that the price of that commodity has risen by 5.3 per cent from the base period.
Producer price
The price received by an enterprise for its commodity or service.
Producer price index for manufactured products
Producer price index for manufactured products measures development in the producer prices of goods manufactured in Finland. The index includes both goods sold at home and exported goods. The price for domestic goods is the factory price exclusive of taxes and the price for export goods is the f.o.b. price. The index covers commodities of industry categories B to E.
Weight structure
Describes what meaning each sub-index (commodity, employee group, etc.) belonging to the index has for total index.
Wholesale price index
The wholesale price index measures development in the purchase prices inclusive of taxes of goods used in Finland. The index includes both domestic and imported goods. The wholesale price for domestic goods is the factory price plus value-added tax and other indirect taxes. The wholesale price for imported goods is the c.i.f. price plus customs duties, value-added tax and other indirect taxes. The index covers commodities of industry categories A to E.
Accuracy, reliability and timeliness
Overall accuracy
There are many possible error sources in producer price indices, for example
- sampling error
- deficient product and enterprise frameworks
- non-response
- quality changes in service products included in price collection
- substitution bias
Timeliness
The producer price indices for manufactured products are published monthly on the 24th day of the month following the statistical reference month or on the first working day following it. As an exception to this rule, the statistics for January are published on the 26th or on the first working day following it due to changes to the weight structure of the index, and the statistics for November are released on the last weekday preceding 24 December.
Punctuality
Indices have been published according to the prescheduled release calendar.
Data revision - practice
Producer price indices are not revised.
Sampling error
The calculation of producer price indices is based on a sample. Sampling error is always associated with sampling. In the calculation solution, the randomness caused by sampling is reduced by the fact that the statistics are based on a panel design: data have been collected repeatedly from the same respondents over a longer period. This procedure ensures that the price change estimates produced by the index are very precise in a sampling technical respect.
Non-sampling error
Substitution bias
Producer price indices use the Laspeyres index formula. Scientific literature on indices often refers to the substitution bias that Laspeyres’ index formula may create. The direction of the bias depends on the target of measurement. In the case of the producer price indices, substitution bias may arise because (when maximising their profits) enterprises react to changes in relative prices by changing their production volumes. For example, if the price of light fuel oil rises relative to petrol, an enterprise engaged in the oil industry can produce more light fuel oil. In such a case, an index calculated with the Laspeyres’ formula underestimates price development from the enterprises’ viewpoint. The significance of the substitution bias depends on the scale at which individual enterprises are able to redirect their production when relative prices change.
Bias caused by new products
Producer price indices may contain bias arising from the entry of new products or services on the market. When speaking of new products reference is often made to electrotechnical and electrical products or digital services whose production and sales can grow quite rapidly. The structural change is also fast in the service industry and new services are developed constantly. If the change is vigorous, the index may not describe sufficiently accurately the average development in the prices of the commodities produced in the economy.
Bias caused by quality change
The objective of producer price indices is to describe pure price development, which is why changes in the quality or characteristics of products must be taken into consideration in the index calculation. The problem of quality change is usually encountered either when a data supplier reports that a product included in the collection is no longer produced, imported or exported, or that changes have been made to an existing product. Changes in quality may cause error in the index as the defining of a pure price change can be difficult and, conversely, the proportion of a price change that is due to changed quality is difficult to estimate and eliminate from calculations. If, as a product changes, we assume that the entire price change is due to a change in the characteristics of the product, we may disregard genuine changes in price, whereby the index incorrectly does not change at all for the product in question. If, then again, we assume that the entire price change is due to a genuine change in price, we may disregard changed product characteristics and the index changes too much.
Producer price indices use the Laspeyres index formula. Scientific literature on indices often refers to the substitution bias that Laspeyres’ index formula may create. The direction of the bias depends on the target of measurement. In the case of the producer price indices, substitution bias may arise because (when maximising their profits) enterprises react to changes in relative prices by changing their production volumes. For example, if the price of light fuel oil rises relative to petrol, an enterprise engaged in the oil industry can produce more light fuel oil. In such a case, an index calculated with the Laspeyres’ formula underestimates price development from the enterprises’ viewpoint. The significance of the substitution bias depends on the scale at which individual enterprises are able to redirect their production when relative prices change.
Bias caused by new products
Producer price indices may contain bias arising from the entry of new products or services on the market. When speaking of new products reference is often made to electrotechnical and electrical products or digital services whose production and sales can grow quite rapidly. The structural change is also fast in the service industry and new services are developed constantly. If the change is vigorous, the index may not describe sufficiently accurately the average development in the prices of the commodities produced in the economy.
Bias caused by quality change
The objective of producer price indices is to describe pure price development, which is why changes in the quality or characteristics of products must be taken into consideration in the index calculation. The problem of quality change is usually encountered either when a data supplier reports that a product included in the collection is no longer produced, imported or exported, or that changes have been made to an existing product. Changes in quality may cause error in the index as the defining of a pure price change can be difficult and, conversely, the proportion of a price change that is due to changed quality is difficult to estimate and eliminate from calculations. If, as a product changes, we assume that the entire price change is due to a change in the characteristics of the product, we may disregard genuine changes in price, whereby the index incorrectly does not change at all for the product in question. If, then again, we assume that the entire price change is due to a genuine change in price, we may disregard changed product characteristics and the index changes too much.
Coverage error
The producer price indices for services are product-based statistics, that is, the main industry of an enterprise manufacturing, exporting or importing a product is irrelevant. The principle of statistics compilation is also economic ownership, that is, exports and imports of a product are not determined by physical movement of products across borders, but by economic ownership and its change. The data from which the samples and weight structures of the statistics are formed do not necessarily take these factors fully into account, which may cause both over-coverage and under-coverage to the sample.
Non-response error
The monthly non-response rate ranges from five to ten per cent in producer price indices.
Comparability
Comparability - geographical
European definitions according to the short-term business statistics regulation are used in the production of the statistics, so the data of the statistics are internationally comparable and cover the whole of Finland.
Comparability - over time
The time series of producer prices are mainly comparable over time.
The base year of the indices is 2015. The classification used in the releases is the CPA 2015 product classification instead of the previously used European industry standard classification system NACE. Publishing of data with base years 2010=100 and 2005=100, and in producer prices for manufactured goods also with base year 1949=100, will continue. Indices of base years 2010=100 and 2005=100, and in producer prices for manufactured goods also of base year 1949=100, will be calculated forward by chaining with the index of the latest base year, so starting from 2018 they will develop in the same way as the base year 2015=100 index.
In connection with changing the base year, the calculation method of the indices was also revised. Starting from 2019, producer price indices are annual chain-linked indices. In practice, the shift to the chain-linked index method means that the weight structure of the producer price indices is updated every year. The new weight structure takes effect starting from the index for January of each year. In addition to the weight structure, product categories and the enterprise sample can also be updated annually. The base year of the index remains unchanged (2015=100). The changes improve the quality of the index, because with their help, changes in production, exports and imports can be taken into account faster.
The chaining coefficients of old base year indices are presented in the Handbook for users.
The base year of the indices is 2015. The classification used in the releases is the CPA 2015 product classification instead of the previously used European industry standard classification system NACE. Publishing of data with base years 2010=100 and 2005=100, and in producer prices for manufactured goods also with base year 1949=100, will continue. Indices of base years 2010=100 and 2005=100, and in producer prices for manufactured goods also of base year 1949=100, will be calculated forward by chaining with the index of the latest base year, so starting from 2018 they will develop in the same way as the base year 2015=100 index.
In connection with changing the base year, the calculation method of the indices was also revised. Starting from 2019, producer price indices are annual chain-linked indices. In practice, the shift to the chain-linked index method means that the weight structure of the producer price indices is updated every year. The new weight structure takes effect starting from the index for January of each year. In addition to the weight structure, product categories and the enterprise sample can also be updated annually. The base year of the index remains unchanged (2015=100). The changes improve the quality of the index, because with their help, changes in production, exports and imports can be taken into account faster.
The chaining coefficients of old base year indices are presented in the Handbook for users.
Coherence - cross domain
The price indices concerning commodities compiled by Statistics Finland can be described as a system whose aim is to measure the development of prices at different stages of production and distribution. Producer price indices for agricultural products, manufactured products and services describe the price development at the early stage of price formation as products leave their producers or enter the country. The price index for wholesale goods would locate in the second stage of distribution. Statistics Finland does not compile a price index for wholesale goods. Wholesale and retail trade margins come under the scope of description of producer price indices for services. In the classification of products, they mainly belong to categories 46 Wholesale trade, except of motor vehicles and motorcycles and 47 Retail trade (excl. motor vehicles and motorcycles); wholesale and retail trade of motor vehicles and the revision is differentiated into category 45. Statistics Finland does not compile price indices for trade margins.
Development in the prices of consumption goods and services at the end use stage is measured by the Consumer Price Index. For the time being price indices are not produced for wholesale goods or trade margins.
Development in the prices of consumption goods and services at the end use stage is measured by the Consumer Price Index. For the time being price indices are not produced for wholesale goods or trade margins.
Coherence - sub-annual and annual statistics
The monthly, quarterly and annual data on the producer price indices are compiled in the same way so they are fully congruent
Coherence -national accounts
The producer price indices are used as a deflator in national accounts. National accounts supply and use tables are used in the compilation of the weight structure of the producer price indices.
Coherence - internal
The producer price indices for manufactured products and services measure development of the prices of products and services produced by enterprises. So, producer price indices depict inflation from the viewpoint of enterprises. Producer price indices belong to short term business statistics that describe the short-term development in various factors and areas of economy. Industrial producer price indices are published monthly. Producer price indices for services are published quarterly.
Five different indices are produced under the producer price indices for manufacturing: producer price index for manufactured products, export price index, import price index, basic price index for domestic supply, and basic price index for domestic supply, including taxes (formerly wholesale price index). The producer price index for services, in turn, describes the price development 9 of services provided by enterprises to other enterprises and the public sector (Business to Business, BtoB), to households (Business to Consumers, BtoC) and to all end users (Business to All, BtoAll). All the above-mentioned indices measure price development slightly differently from each other because the price concepts used, and the industries covered vary by index.
The producer price indices for manufactured products and services are compiled with the same methods.
Five different indices are produced under the producer price indices for manufacturing: producer price index for manufactured products, export price index, import price index, basic price index for domestic supply, and basic price index for domestic supply, including taxes (formerly wholesale price index). The producer price index for services, in turn, describes the price development 9 of services provided by enterprises to other enterprises and the public sector (Business to Business, BtoB), to households (Business to Consumers, BtoC) and to all end users (Business to All, BtoAll). All the above-mentioned indices measure price development slightly differently from each other because the price concepts used, and the industries covered vary by index.
The producer price indices for manufactured products and services are compiled with the same methods.
Source data and data collections
Source data
The data collection and calculation of producer price indices are based on a sample. The samples of CPA product categories and enterprise data suppliers included in producer price indices are generally revised annually; starting from 2019, the producer price indices adopted an annual chain index, which means the sample is updated and maintained annually.
In producer price indices the sample is formed by first selecting the product sample (CPA product categories) after which the enterprise sample is formed for each CPA product category. Price data are collected from enterprises included in the sample from which the price index is calculated by weighting. This price index is considered to be descriptive of average development in the prices of all commodities included in the population.
The frames of CPA product categories for the producer price indices is built by using the data of the supply and use tables of national accounts, the statistics on industrial production and Finnish Customs' statistics on foreign trade. The frames contain the values of production produced in Finland, and exports and imports by product category. Transit exports are deducted from exports, so the figure that remains is the value of exports produced in Finland only. Transit exports are correspondingly deducted from imports so the figure that remains is the value of imports remaining in Finland only. The value of production staying on the domestic market is obtained by deducting exports from the value of domestic supply.
The most important function of producer price indices is to serve as deflators. Producer price indices are used to deflate the value of production in, for instance, national accounts calculations. From the deflator perspective it is important that a price index is also compiled for all CPA product categories for which domestic supply/exports/imports is high. The emphasis on the indices’ function as deflator affects the selection of product categories for producer price indices. The cut off method is applied in sampling the product groups. The CPA product categories with the highest production/export/import values are selected for the price indices. However, this was not a pure cut-off method in which all units beyond a certain threshold would be included. Occasionally, a product category that should in fact be included in the sample may be missing and, on the other hand, product categories that do not exceed the threshold value may be included.
In addition to the data collected direct from enterprises, price data or point figures from other statistics of Statistics Finland are also used in calculating the producer price indices. These statistics include such as the Index of Producer Prices of Agricultural Products, the Building Cost Index, the Cost Index of Civil Engineering Works, the Consumer Price Index and the Volume Index of Newbuilding. The data of the Index of Producer Prices of Agricultural Products are used in the monitoring of vegetable prices. The data of the Building Cost Index are used to monitor the prices of certain building products. An implicit price index derived from the Cost Index of Civil Engineering Works and the Volume Index of Newbuilding is used to monitor prices in construction.
The development in the prices of certain raw material based products in imports and exports is measured with the import and export unit value prices obtained from the foreign trade statistics of Finnish Customs. Unit values are only used to measure the price development of homogeneous product groups, such as timber, cereal, and imported and exported electricity. In addition to data from Finnish Customs, data from the Finnish Forest Research Institute, the Natural Resources Institute Finland, the Energy Authority, the Finnish Energy Industries and some international commodity exchanges, such as the London Metal Exchange are used in the producer price indices
In producer price indices the sample is formed by first selecting the product sample (CPA product categories) after which the enterprise sample is formed for each CPA product category. Price data are collected from enterprises included in the sample from which the price index is calculated by weighting. This price index is considered to be descriptive of average development in the prices of all commodities included in the population.
The frames of CPA product categories for the producer price indices is built by using the data of the supply and use tables of national accounts, the statistics on industrial production and Finnish Customs' statistics on foreign trade. The frames contain the values of production produced in Finland, and exports and imports by product category. Transit exports are deducted from exports, so the figure that remains is the value of exports produced in Finland only. Transit exports are correspondingly deducted from imports so the figure that remains is the value of imports remaining in Finland only. The value of production staying on the domestic market is obtained by deducting exports from the value of domestic supply.
The most important function of producer price indices is to serve as deflators. Producer price indices are used to deflate the value of production in, for instance, national accounts calculations. From the deflator perspective it is important that a price index is also compiled for all CPA product categories for which domestic supply/exports/imports is high. The emphasis on the indices’ function as deflator affects the selection of product categories for producer price indices. The cut off method is applied in sampling the product groups. The CPA product categories with the highest production/export/import values are selected for the price indices. However, this was not a pure cut-off method in which all units beyond a certain threshold would be included. Occasionally, a product category that should in fact be included in the sample may be missing and, on the other hand, product categories that do not exceed the threshold value may be included.
In addition to the data collected direct from enterprises, price data or point figures from other statistics of Statistics Finland are also used in calculating the producer price indices. These statistics include such as the Index of Producer Prices of Agricultural Products, the Building Cost Index, the Cost Index of Civil Engineering Works, the Consumer Price Index and the Volume Index of Newbuilding. The data of the Index of Producer Prices of Agricultural Products are used in the monitoring of vegetable prices. The data of the Building Cost Index are used to monitor the prices of certain building products. An implicit price index derived from the Cost Index of Civil Engineering Works and the Volume Index of Newbuilding is used to monitor prices in construction.
The development in the prices of certain raw material based products in imports and exports is measured with the import and export unit value prices obtained from the foreign trade statistics of Finnish Customs. Unit values are only used to measure the price development of homogeneous product groups, such as timber, cereal, and imported and exported electricity. In addition to data from Finnish Customs, data from the Finnish Forest Research Institute, the Natural Resources Institute Finland, the Energy Authority, the Finnish Energy Industries and some international commodity exchanges, such as the London Metal Exchange are used in the producer price indices
Data collection
Data for Statistics Finland's own data collection are gathered with a web questionnaire. In addition, Statistics Finland has an agreement with Finnish Customs that Finnish Customs delivers data related to international trade to Statistics Finland on a day agreed monthly.
The web questionnaire of the producer prices has been tested in connection with its introduction and when changes have been made to it. The response burden of the data collection is monitored regularly. In addition, the non-response rate of the inquiry is monitored monthly.
The web questionnaire of the producer prices has been tested in connection with its introduction and when changes have been made to it. The response burden of the data collection is monitored regularly. In addition, the non-response rate of the inquiry is monitored monthly.
Frequency of data collection
The data for the producer price for manufactured products are collected monthly.
Cost and burden
The response burden was last measured in autumn 2018. In the monthly data collection for producer price indices for manufactured products and services, the median for the response time is 15 minutes per response round per respondent. The average sample size per collection is 915 respondents and around 11,000 responses are given annually.
Methods
Data compilation
If neither an overlapping price observation nor an expert assessment can be obtained and price measurement methods cannot be applied, the price development of the product is imputed with the average change in the prices of other products belonging to the same commodity group. The imputation is based on the assumption that the prices of products in the same commodity group develop in roughly the same way.
The overall index of producer price indices describes the average development in the prices of the product groups included in the index. The individual products whose prices are monitored, or variants, reported by an enterprise do not have their own weights but the enterprise-specific CPA product category indices, or micro indices, are calculated as the geometric average of the price ratios (=current price/price at comparison period) of the products belonging to that category. The micro indices are aggregated into an overall index and to the higher levels of the CPA product classification according to Laspeyres' index formula with a weighting coefficient corresponding to each product category and enterprise. In other words, changes in the price ratios of individual products have different-sized effects on the overall index.
The overall index of producer price indices describes the average development in the prices of the product groups included in the index. The individual products whose prices are monitored, or variants, reported by an enterprise do not have their own weights but the enterprise-specific CPA product category indices, or micro indices, are calculated as the geometric average of the price ratios (=current price/price at comparison period) of the products belonging to that category. The micro indices are aggregated into an overall index and to the higher levels of the CPA product classification according to Laspeyres' index formula with a weighting coefficient corresponding to each product category and enterprise. In other words, changes in the price ratios of individual products have different-sized effects on the overall index.
Data validation
Producer price indices are “pure” price indices, which are not affected by changes in the quality of the products (in statistical jargon, quality changes refer to changes in the characteristics of the product) . Efforts are made to eliminate price changes caused by changes in the characteristics of the products from the index. The physical, technical and financial (such and conditions on financing, guarantee, whether product is sold to a wholesaler or retailer, etc.) characteristics of a product must remain unchanged. In practice, product characteristics change continuously. Changes to the characteristics and their treatment are among the main challenges in index calculations.
In producer price indices, several methods are applied to control changes in the characteristics to make sure that the best possible method for measuring price change is always used. In the first place, efforts are made to collect an overlapping price observation for the changed product. In practice, this means that as the product changes the price for the preceding period is collected in addition to the price for the reference period. This allows the true change in the price to be calculated and the price history stays unbroken despite the change in the monitored product. The price for the reference period can concern the month or quarter and the preceding period refers to the preceding corresponding period. If overlapping price observations cannot be obtained, various pricing methods can be used to measure/assess the price change, such as model or component pricing. Expert assessment can also be used to assess price changes. In this case, the respondent is asked to assess which proportion of the price change is a genuine change in price and which proportion is due to the change in the characteristics of the product. The expert assessment is based on the idea that the data supplier enterprise is best equipped to estimate the price development of its own products. If neither an overlapping price observation nor an expert assessment can be obtained and price measurement methods cannot be applied, the price development of the product is imputed with the average change in the prices of other products belonging to the same commodity group. The imputation is based on the assumption that the prices of products in the same commodity group develop in roughly the same way. If none of the above methods can be used, discretionary use of the following methods is possible:
- The characteristics of the changed product are assumed to be the same as that of the earlier product. In this case, the price change is included in the index as such.
- The price change is assumed to derive entirely from a change in the characteristics, in which case the price change is eliminated, and the index does not change as the product changes.
Price measuring and methodologies to control changes in quality are constantly being developed and international guidelines and recommendations are taken into account when applying different methods.
In producer price indices, several methods are applied to control changes in the characteristics to make sure that the best possible method for measuring price change is always used. In the first place, efforts are made to collect an overlapping price observation for the changed product. In practice, this means that as the product changes the price for the preceding period is collected in addition to the price for the reference period. This allows the true change in the price to be calculated and the price history stays unbroken despite the change in the monitored product. The price for the reference period can concern the month or quarter and the preceding period refers to the preceding corresponding period. If overlapping price observations cannot be obtained, various pricing methods can be used to measure/assess the price change, such as model or component pricing. Expert assessment can also be used to assess price changes. In this case, the respondent is asked to assess which proportion of the price change is a genuine change in price and which proportion is due to the change in the characteristics of the product. The expert assessment is based on the idea that the data supplier enterprise is best equipped to estimate the price development of its own products. If neither an overlapping price observation nor an expert assessment can be obtained and price measurement methods cannot be applied, the price development of the product is imputed with the average change in the prices of other products belonging to the same commodity group. The imputation is based on the assumption that the prices of products in the same commodity group develop in roughly the same way. If none of the above methods can be used, discretionary use of the following methods is possible:
- The characteristics of the changed product are assumed to be the same as that of the earlier product. In this case, the price change is included in the index as such.
- The price change is assumed to derive entirely from a change in the characteristics, in which case the price change is eliminated, and the index does not change as the product changes.
Price measuring and methodologies to control changes in quality are constantly being developed and international guidelines and recommendations are taken into account when applying different methods.
Documentation on methodology
Methodological description for the producer price index is available in the statistics' Handbook for users
Principles and outlines
Contact organisation
Statistics Finland
Contact organisation unit
Economic Statistics
Legal acts and other agreements
The compilation of statistics is guided by the Statistics Act. The Statistics Act contains provisions on collection of data, processing of data and the obligation to provide data. Besides the Statistics Act, the Data Protection Act and the Act on the Openness of Government Activities are applied to processing of data when producing statistics.
Statistics Finland compiles statistics in line with the EU’s regulations applicable to statistics, which steer the statistical agencies of all EU Member States.
Producer price indicies comply with the following regulations:
Further information: Statistical legislation
Statistics Finland compiles statistics in line with the EU’s regulations applicable to statistics, which steer the statistical agencies of all EU Member States.
Producer price indicies comply with the following regulations:
- Regulation (EU) 2019/2152 of the European Parliament and of the Council on European business statistics
- Commission Implementing Regulation (EU) 2020/1197
Further information: Statistical legislation
Confidentiality - policy
The data protection of data collected for statistical purposes is guaranteed in accordance with the requirements of the Statistics Act (280/2004), the Act on the Openness of Government Activities (621/1999), the EU's General Data Protection Regulation (EU) 2016/679 and the Data Protection Act (1050/2018). The data materials are protected at all stages of processing with the necessary physical and technical solutions. Statistics Finland has compiled detailed directions and instructions for confidential processing of the data. Employees have access only to the data essential for their duties. The premises where unit-level data are processed are not accessible to outsiders. Members of the personnel have signed a pledge of secrecy upon entering the service. Violationof data protection is punishable.
Further information: Data protection | Statistics Finland (stat.fi)
Further information: Data protection | Statistics Finland (stat.fi)
Confidentiality - data treatment
The confidentiality of the information, prices, is taken into account when publishing the statistics: no information on individual enterprise can be deducted from the results.
If the price movements of single enterprise can be detected from any 1-, 2-, 3- or 4-digit CPA level index, then that index series sent to Eurostat is flagged as confidential data.
If the price movements of single enterprise can be detected from any 1-, 2-, 3- or 4-digit CPA level index, then that index series sent to Eurostat is flagged as confidential data.
Release policy
Statistics Finland publishes new statistical data at 8 am on weekdays in its web service. The release times of statistics are given in advance in the release calendar available in the web service. The data are public after they have been updated in the web service.
Further information: Publication principles for statistics at Statistics Finland
Further information: Publication principles for statistics at Statistics Finland
Data sharing
The published producer price indices are delivered monthly to Eurostat, which publishes them on its web pages.
Other
The publication of topical news, such as news highlights, is decided on a case-by-case basis.
The channels of topical news are
https://www.stat.fi/til/thi/index_en.html
www.facebook.com/Tilastotohtori
https://twitter.com/tilastokeskus
The channels of topical news are
https://www.stat.fi/til/thi/index_en.html
www.facebook.com/Tilastotohtori
https://twitter.com/tilastokeskus
Accessibility and clarity
Statistical data are published as database tables in the StatFin database. The database is the primary publishing site of data, and new data are updated first there. When releasing statistical data, existing database tables can be updated with new data or completely new database tables can be published.
In addition to statistical data published in the StatFin database, a release on the key data is usually published in the web service. If the release contains data concerning several reference periods (e.g. monthly and annual data), a review bringing together these data is published in the web service. Database tables updated at the time of publication are listed both in the release and in the review. In some cases, statistical data can also be published as mere database releases in the StatFin database. No release or review is published in connection with these database releases.
Releases and database tables are published in three languages, in Finnish, Swedish and English. The language versions of releases may have more limited content than in Finnish.
Information about changes in the publication schedules of releases and database tables and about corrections are given as change releases in the web service.
In addition to statistical data published in the StatFin database, a release on the key data is usually published in the web service. If the release contains data concerning several reference periods (e.g. monthly and annual data), a review bringing together these data is published in the web service. Database tables updated at the time of publication are listed both in the release and in the review. In some cases, statistical data can also be published as mere database releases in the StatFin database. No release or review is published in connection with these database releases.
Releases and database tables are published in three languages, in Finnish, Swedish and English. The language versions of releases may have more limited content than in Finnish.
Information about changes in the publication schedules of releases and database tables and about corrections are given as change releases in the web service.
Micro-data access
Unit-level data of the producer price indices are used only for producing the statistics and others than producers of statistics do not have access to microdata.
Data revision - policy
Revisions – i.e. improvements in the accuracy of statistical data already published – are a normal feature of statistical production and result in improved quality of statistics. The principle is that statistical data are based on the best available data and information concerning the statistical phenomenon. On the other hand, the revisions are communicated as transparently as possible in advance. Advance communication ensures that the users can prepare for the data revisions.
The reason why data in statistical releases become revised is often caused by the data becoming supplemented. Then the new, revised statistical figure is based on a wider information basis and describes the phenomenon more accurately than before.
Revisions of statistical data may also be caused by the calculation method used, such as annual benchmarking or updating of weight structures. Changes of base years and used classifications may also cause revisions to data.
The reason why data in statistical releases become revised is often caused by the data becoming supplemented. Then the new, revised statistical figure is based on a wider information basis and describes the phenomenon more accurately than before.
Revisions of statistical data may also be caused by the calculation method used, such as annual benchmarking or updating of weight structures. Changes of base years and used classifications may also cause revisions to data.
User needs
Producer price indices are used to describe short-term inflationary pressures in different sectors of the economy. They are also used in GDP and volume calculations. Research institutes and enterprises use the indices in their reports, monitoring and forecasts. They can also be used as index clauses in agreements.
User satisfaction
Eurostat assesses six-monthly the fulfilment of the regulation requirements of short-term business statistics. The producer price index belongs to short-term business statistics, and Finland's latest assessment of the fulfilment of the regulations was the maximum, 10 points.
Quality assessment
The quality of the producer price index is evaluated in several different stages of the statistical process. Changes in unit-level data are examined monthly and the correctness of exceptional data is examined. Aggregate level data are also checked.
Quality assurance
Quality management requires comprehensive guidance of activities. The quality management framework of the field of statistics is the European Statistics Code of Practice (CoP). The frameworks complement each other. The quality criteria of Official Statistics of Finland are also compatible with the European Statistics Code of Practice.
Further information: Quality management | Statistics Finland (stat.fi)
Further information: Quality management | Statistics Finland (stat.fi)
User access
Data are released to all users at the same time. Statistical data may only be handled at Statistics Finland and information on them may be given before release only by persons involved in the production of the statistics concerned or who need the data of the statistics concerned in their own work before the data are published.
Further information: Publication principles for statistics
Unless otherwise separately stated in connection with the product, data or service concerned, Statistics Finland is the producer of the data and the owner of the copyright.The terms of use for statistical data.
Further information: Publication principles for statistics
Unless otherwise separately stated in connection with the product, data or service concerned, Statistics Finland is the producer of the data and the owner of the copyright.The terms of use for statistical data.