The rebased series for base year 2021=100 of the Services Producer Price Index (SPPI) has been published as part of the Quarter 1 2024 release. The series has expanded from 200 to 700 respondent firms and from 1,000 to 2,700 price quotations. A methodological review has been completed and the revised data for base period 2021=100 was published today (14 June 2024) in the SPPI release and on PxStat. The revisions to the data have impacted the reference periods from Quarter 1 2021 to Quarter 4 2023.
Price information for the SPPI is collected in a quarterly inquiry of services. Approximately 2,700 quarterly price quotations are collected from a panel of some 700 respondent firms.
Three issues were identified during the review. These are outlined in Table 1 along with their solutions.
| Table 1: Scope of the SPPI review | ||
| Problem | Solution | |
|---|---|---|
| Price records with prices but no weights | Some observations were identified with price information but no weights. This means that those observations were excluded from the aggregation in the relevant time period, by being assigned zero weight, where it would have been preferable to include the observations. | A new process was implemented to ensure that weights were assigned (to the greatest extent possible) to the collected price information. |
| Application of the Laspeyres index formula | Quarterly price relatives for an industry were calculated by taking a weighted arithmetic average of the quarterly change in product prices for enterprises in that industry. These industry quarterly price relatives were then used at higher levels of aggregation to produce the published price indices. These aggregations were intended to be Laspeyres indexes but the formula was not applied correctly. Further information on the application of the Laspeyres formula in SPPI is included in Appendix 1. | The calculation of the SPPI has been redesigned. In the new design, quarterly changes of product prices for each enterprise are combined in an unweighted geometric (Jevons) index for that enterprise. These enterprise indices are combined using a weighted arithmetic (Laspeyres) formula to produce indices for each industry. The industry indices are then combined using a Laspeyres formula to produce the published indexes. |
| Alternative data sources | How to increase the coverage of services producer prices without increasing the burden on respondents. |
The CSO are actively webscraping prices and leveraging the following CSO surveys in the compilation of the SPPI: the Consumer Price Index and the Earnings, Hours and Employment Costs Survey. We will continue to seek other data sources, which may result in breaks in series. |
| Base 2015=100 | Base 2021=100 | ||
| H | Transportation & Storage | H | Transportation & Storage |
|---|---|---|---|
| 49.4 | Freight Transport by Road and Removal | 49 | Land Transport |
| 50.1/50.2 | Sea & Coastal Transport | 50 | Water Transport |
| 51 | Air Transport | 51 | Air Transport |
| 52.1/52.24 | Warehousing, Storage & Cargo Handling | 52 | Warehousing & Storage |
| 53.1/53.2 | Postal & Courier | 53 | Postal & Courier |
| I | Accommodation & Food | ||
| 55 | Accommodation | ||
| 56 | Food & Beverages | ||
| J | Information & Communication | J | Information & Communication |
| 58 | Publishing | ||
| 59 | Motion Picture, Sound & Music Publishing | ||
| 60 | Programming & Broadcasting | ||
| 61 | Telecommunications | ||
| 62 | Computer Programming & Consultancy | 62 | Computer Programming & Consultancy |
| 63 | Information Services | ||
| L | Real Estate | ||
| 68 | Real Estate | ||
| M | Professional, Scientific & Technical | M | Professional, Scientific & Technical |
| 69.1/69.2 | Legal & Accounting | 69 | Legal & Accounting |
| 70.2 | Public Relations & Business Management & Consultancy | 70.2 | Management Consultancy |
| 71.1/71.2 | Architecture, Engineering & Technical Testing & Analysis | 71 | Architecture, Engineering, Technical Testing & Analysis |
| 73.1/73.2 | Advertising, Media Representation & Market Research | 73 | Advertising & Market Research |
| 74 | Other Professional, Scientific &Technical | ||
| N | Administrative & Support | N | Administrative & Support |
| 77 | Rental & Leasing | ||
| 78 | Employment | 78 | Employment |
| 79 | Travel Agency, Tour Operator & Other Reservation | ||
| 80 | Security & Investigation | 80 | Security & Investigation |
| 81.2 | Industrial & Building Cleaning | 81 | Services to Buildings & Landscape |
| 82 | Office Administration & Other Business Supports | ||
At present the quality of indices for the following NACE categories are deemed insufficient for publication:
At both levels of aggregation for the SPPI, quarterly price relatives were being calculated by taking a weighted arithmetic average of the quarterly change in product prices. The following formula was being used:
| ∑W0 | Pi |
* |
100 |
| Pi-1 | |||
| ∑W0 | |||
where W0 are the base period weights; Pi are current period prices; Pi-1 are previous period prices.
However, this was not the correct application of the Laspeyres formula. The formula that was implemented as part of the revisions to SPPI was as follows:
| ∑Wi-1 | Pi |
* |
100 |
| Pi-1 | |||
| ∑Wi-1 | |||
where Wi-1 are the previous period price updated weights.
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