Services Producer Price Index Quarter 2 2024

Purpose

The Services Producer Price Index (SPPI) is made up of a set of individual price indices that measure changes in the average level of prices charged by producers for services.

The individual price indices are aggregated together to create a “services industry” index.

Relevancy

There are two main uses of SPPI;

• As a short-term indicator of the business cycle
• To provide deflators for national accounts

Coverage

The Services Producer Price Index covers service industries as set by Regulation (EU) 2019/2152 of the European Parliament concerning Business Statistics.

This expanded the previous limited sectoral coverage requirements for service prices. New indices are required for all NACE sectors from NACE H to N (except K). This means the CSO is surveying new sectors of the Irish economy for information on the prices of the services they provide as well as increasing the sample sizes for sectors already surveyed as part of the SPPI survey. This improved SPPI survey results in a more accurate and reliable measure of inflation of services prices in Ireland. 

The following industries are selected (based on the Nace Rev 2 Classification):

At present the quality of indices for the following NACE categories are deemed insufficient for publication:

• 59 Motion Picture, Sound & Music Publishing
• 63 Information Services

Nace Classification

The business activity classifications used in this Statistical release are based on the Statistical Classification of Economic Activities in the European Community i.e. Nace Rev 2. The descriptions of particular NACE Rev 2 sectors are shown in abbreviated form in the release. For further information on the NACE Rev 2 classifications, visit the Eurostat Nace Coder.

Scope

The European Parliament And Council Regulation (EU) No 2019/2152 requires Member States to provide data on the change in price of services within the business sector.

Price Collection

All indices in the series are based on prices collected on a quarterly basis, using either the average price per quarter or the price on the 15^th of the middle month of the reference period.

Prices used in the compilation of these indices are: 

• Exclusive of VAT
• Inclusive of surcharges (such as for fuel)

The Transport, Hospitality, Information and Communication, Professional, Travel and Office Administration, Real Estate and Rental indices are constructed using data collected by the Consumer Price Section.

The Employment and Human Resource Activities index is constructed using a combination of survey data and data from the Earnings, Hours and Employment Cost Survey.

Weights

The SPPI has been rebased to 2021 = 100. Weights at Nace Rev2 for 2021 were estimated by the SPPI Section primarily using data from the CSO Annual Services Inquiry. Weights are “gross” – they are based on turnover from sales to all sectors, including non-resident.

Methodology

More information on SPPI’s is available from the Eurostat Methodological guide for developing producer price indices for services which can be viewed at the OECD website. Additional methodological information can be found on the website of the Voorburg Group on Services Statistics at the Voorburg Group website.

Calculating percentage changes in the index

The movement of the SPPI is expressed as percentage change, rather than a change in index points, because index point changes are affected by the level of the index in relation to its base period, whereas percentage changes are not.

The example below illustrates the computation of a percentage change: