Chapter 3 Examples of Changes to Series

CSO publication, 28 November 2024, 11am

3.1 Wholesale Electricity Prices

For the wholesale price of electricity, given there is a single wholesale electricity market, the effect of the rebase is to rescale the series so that the average value of the index in 2021 is now 100. Figure 3.1 below presents the wholesale electricity series as published from January 2021 through to September 2024 with the base of 2015=100 along with the series rebased to 2021=100.

SEMO launched a new market on October 1st 2018 and this required changes to the calculation of the CSO's electricity index in the old series (2015=100). From January 2019 onwards, only the Day Ahead Single Market Price was used in the index, and the Pass Through costs for Generation (i.e. Capacity Payments, Market Operators Costs and Imperfection Changes) were not included. As this change happened before the start of the new 2021=100 series the prices used in the construction of this series are consistent in both series for the overlapping time period.

3.2 Building and Construction (Materials and Wages)

In addition to the usual changes involved in a rebase mentioned in Chapter 1, Wholesale Prices Indexes measured in Tables 3-5 have seen the following changes from the 2015=100 series to the rebased 2021=100 series:

• The sampling frame used has moved to an enterprise level rather than local unit level. Previously, data for the PPI and WPI was collected on the basis of local units; as part of the change in methodology to better align with European regulations, we have moved to surveying on an enterprise level. This also enables weights coming from the Census of Industrial Production and other sources to be appropriately matched to enterprises.
• Products remain grouped using the same product groups as those used in the 2015=100 series.
• The aggregation process has changed – previously the WPI index (2015=100 series) used a variant of the fixed weighted Laspeyres Index (so used product level weights at the elementary aggregation stage). However, in comparison to the 2015=100 PPI sample, the variation in product level weights was less extreme in the WPI sample, with the majority of companies having equal weight or very similar weight for all their WPI products in the 2015=100 sample.
• Weights are now first introduced at a product group level rather than on individual product levels.

For the Building and Construction (materials and wages) index, there are changes to both the aggregation process and also to the companies and products within the sample. For Table 3 from the WPI release, aggregation still occurs based on the same product groups as they feed into different rows of the table (such as electrical fittings, cement, glass).

3.3 Changes in the Producer Prices Index

In addition to the usual changes involved in a rebase mentioned in Chapter 1, the Producer Prices Index has seen the following changes:

• The sampling frame used has moved to an enterprise level rather than local unit level. Previously, data for the PPI and WPI was collected on the basis of local units; as part of the change in methodology to better align with European regulations, we have moved to surveying on an enterprise level. This also enables weights coming from the Census of Industrial Production and other sources to be appropriately matched to enterprises.
• Products are now grouped using Prodcom classification to inform product groups.
• The aggregation process has changed – previously the PPI index (2015=100 series) used a variant of the fixed weighted Laspeyres Index (so used product level weights at the elementary aggregation stage).
• Weights are now first introduced at a product group level rather than on individual product levels.

As the Industrial Producer Price index uses the NACE of the companies to inform where the weights should be assigned, and companies are now sampled on an enterprise level the new series diverges from the old (even rescaled version) series.

To examine the impact of the change in sampling, how the NACE of the company is used, how the products are grouped into product groups, as well as improvements made to the aggregation and weighting in more detail, NACE 10 (Food Products) is used as an example.