Industrial Producer Price Indices

Methodology

Contents

Released since 2001 have been revised industrial producer price indices calculated according to new revised index patterns, which are based on the domestic sales structure of 1999 (former indices on the sales structure of 1993).

The weight systems and samples of price representatives and reporting units (respondents) were revised in the framework of a comprehensive revision, which was run during 2000. The weights were determined on the basis of 1999 sales.

At the same time, the basic period was changed. It is now December 1999 (formerly December 1993) for new price indices released since 2001. The average of 2000 (formerly it was the average of 1994) was introduced for all price indices as a standard index reference period, which is calculated in a derived way from the constant base December 1999 like other price bases.

The price indices are calculated for prices of samples of representatives and for selected reporting units by aggregating simple price indices into an aggregate using a modified Laspeyres formula. The calculation uses 1999 constant weights.


where:
p1 = the reference period price,
p0 = the basic period price (December 1999),
p0q0 = the constant weight – value indicator, usually in terms of per mill
(1999 sales).

As per January 1st, the new revised scheme of industrial producer price indices valid from 2001 contained 5736 price representatives, surveyed in 1340 reporting units. One quarter of representatives and nearly one fifth of respondents were changed, together with a moderate increase in their total number (formerly 5656 representatives and 1250 respondents), as compared to the situation before the revision.

The industrial producer price index covers the prices of products produced in the sections C to E of NACE Revision 1. The index excludes 21 classes of 4-digit code classification level. These classes are either services of production nature, or they are insignificant from the weight point of view.

The publication contains price indices for divisions and groups of CZ-CPA, which are aggregated into subsections and sections, and industry as a total. In some commodity groups there are no index quotations to protect the individual character of the data (similarly to former indices). Total industry means aggregating C, D and E sections. The classification of products in its current version, valid since 1st January 2003, is prepared on the basis of the European standard of CPA 2002 (Classification of Products by Activity).

The price survey methods remain unchanged. The monthly industrial producer price indices are calculated on the basis of prices reported by statistical questionnaire Industry Prices 1-12. This questionnaire is filled out by selected industrial enterprises for selected representatives. The prices reported are domestic prices agreed between supplier and customer excluding value added tax, excluding excise tax and transport costs and services, invoiced in the reference month for a considerable transaction between the tenth to twelfth calendar day.

The weights in the revised industrial producer price indices were determined on the basis of 1999 sales structure given by P5-01 questionnaires (at CPA 4-digit level), and by P2-01 Industry questionnaires (at CPA 6-digit level) and also by sales data for groups of representatives and/or representatives in the Industry Prices 1-12 questionnaires.

The new producer price indices are calculated and published to the bases: December 1999 = 100, 2000 average = 100, previous period = 100, corresponding period of the preceding year = 100. Besides, ratio of rolling averages index (ratio of the average of last 12 months´ indices to the average of previous 12 months´ indices, calculated from the indices to December 1999 = 100 base) is published.

Continuation of the time series published before 2001, still valid, and of the revised indices released since January 2001 are ensured by using coefficients (conversion bridges) calculated from the ratio of revised December 2000/December 1999 indices to original December 2000/December 1999 indices. The indices for 2000 listed in the table of this publication have been converted already. The converted time series of the indices of individual price groups for previous years are released by the CZSO in the publication “Industrial Producer Price Indices – Revision 2000”.

Since January 2003, Industrial producer price indices are published by Main Industrial Groupings (MIGs), too. The Main Industrial Groupings are defined by the Commission Regulation (EC) No 586/2001 of 26 March 2001 on implementing the Council Regulation (EC) No 1165/98 concerning short-term statistics.

Since 2003 the delivered prices of oil products to households and industry have been released monthly. The methods of average price surveys are based on the Council Decision 1999/280/EC regarding a Community procedure for information and consultation on crude oil supply costs and the consumer prices of petroleum products and on the Commission Decision 1999/566/EC. The prices of oil products are collected monthly by the national statistical survey Prices E3-12. The recorded prices are the most frequently charged delivered prices excluding transport costs, inclusive of VAT and excise tax and net of VAT and excise tax, agreed between supplier and customer inland at the 15th calendar day of the month. The „supplier“ means producer or distributor of domestically produced or imported oil products. The „customer“ means end user, characterized by the size of an offtake. In low sulphur fuel oil (lines 1 and 2) and high sulphur fuel oil (lines 3 and 4) it means by deliveries of less than 2000 tonnes per month or less than 24000 tonnes per year for industry. In heating gas oils (lines 5 to 8) it means by individual deliveries of 2000 to 5000 litres for households and less than 2000 litres for industry.

Since the year 2002 average prices of natural gas and electricity for individual standard consumers valid on 1st January and 1st July of the observed year have been published (in February publication the prices as at 1st January are given and in August publication the prices as at 1st July). These prices are purveyed to the Statistical Office of the European Union (Eurostat) at the same time. The prices of natural gas are surveyed by the state statistical questionnaire Prices E6-04. Average prices are calculated as a weighted arithmetic average of prices recorded by the individual gas distribution companies. The prices of electricity are surveyed by the state statistical questionnaire Prices Elec 7-04. Average prices are calculated as a simple arithmetic average of prices reported by the individual electricity distribution companies. The reported prices are domestic prices agreed between the distribution company and its 1st consumer.

Since the year 2005 the publication of these prices has been enlarged, always to 1st day in the quarter. To the publication also the average quarterly prices of electricity and natural gas for industry total have been added (in January publication the average prices as at 4th quarter etc.). Average prices are calculated as a weighted arithmetic average from the average prices of the individual standard consumers and their share in the yearly consumption. For the Czech Republic as an OECD member state the above prices are presented to the International Energy Agency (IEA). The standard consumers are based on the Council Directive 90/377/EEC concerning a Community procedure to improve the transparency of electricity and natural gas prices charged to industrial end-users. The calculation of the quarterly average price of electricity is enlarged by the standard consumers, which are connected to low voltage network (businessmen).