Division 4) Variable 130201: Producer prices

It is the objective of the producer price index to measure the development of transaction prices of economic activities in industry, construction, and services.

The following rules apply for the definition of producer prices:

All price-determining characteristics of the products are taken into account, including e.g. quantity of units sold, transport provided, surcharges, discounts, rebates, service conditions, guarantee conditions, destination etc.

Producer prices measure the price development from the point of view of the producer/seller. The appropriate price is the basic price that excludes VAT and similar deductible taxes directly linked to turnover as well as all duties and taxes on the goods and services invoiced by the unit, whereas subsidies on products received by the producer, if there are any, should be added.

In order to show the true development of price movements, it should be an actual transaction price, and not a list price.

In order to show pure price movements, the producer price index compilation should take into account and adjust for quality changes in products.

The specification must be such that in subsequent reference periods, the observation unit is able uniquely to identify the product and to provide the appropriate price per unit.

The index should in principle reflect the average price during the reference period. In practice the information actually collected may refer to a particular day in the middle of the reference period that should be determined as a representative figure for the reference period. For products with a significant impact on the national economy that are known to have, at least occasionally, a volatile price development, it is important that the index does indeed reflect average prices.

Price data should reflect prices at the moment of the actual transaction, i.e. when claims and obligations arise, are transformed or cancelled.

Service prices should in principle be recorded when the service is provided. If the service delivery spans over several time periods or when services are bought in advance of the service delivery, appropriate adjustments have to be made

The service producer price index for an economic activity measures the average price development of all services, Business-to-All, which is composed of Business-to-Business- B2B, and Business-to-consumers- B2C. Sales to public sector, Business-to-Government – B2G, is also included in B2B.