1. Main points
The headline rate of output prices showed positive growth of 6.7% on the year to September 2021, up from 6.0% in August 2021.
The headline rate of input prices showed positive growth of 11.4% on the year to September 2021, up from 11.2% in August 2021.
Petroleum products and crude oil provided the largest upward contributions to the change in the annual rates of output and input inflation respectively.
The annual rate for the Services Producer Price Index (SPPI) showed positive growth of 3.6% in Quarter 3 (Jul to Sep) 2021, up from 2.0% in Quarter 2 (Apr to Jun) 2021.
Professional, scientific and technical services provided the largest upward contribution to the annual rate.
2. Analysis
Figure 1: Input PPI is more volatile over time than output inflation
Input and output PPI, UK, September 2011 to September 2021
Source: Office for National Statistics – Producer Price Index
Download this chart Figure 1: Input PPI is more volatile over time than output inflation
Image .csv .xlsOn the month, the rate of output inflation was 0.5% in September 2021, down from 0.7% in August 2021 (Table 1).
All manufactured products (GB7S) | ||||
---|---|---|---|---|
PPI Index (2015=100) | 1-month rate | 12-month rate | Change in the 12-month rate (percentage points) | |
2020 Sept | 107.8 | -0.1 | -1.7 | 0.0 |
Oct | 107.9 | 0.1 | -1.4 | 0.3 |
Nov | 108.3 | 0.4 | -0.6 | 0.8 |
Dec | 108.7 | 0.4 | -0.3 | 0.3 |
2021 Jan | 109.4 | 0.6 | 0.2 | 0.5 |
Feb | 110.2 | 0.7 | 1.0 | 0.8 |
Mar | 110.6 | 0.4 | 1.9 | 0.9 |
Apr | 111.0 | 0.4 | 3.5 | 1.6 |
May | 111.8 | 0.7 | 4.3 | 0.8 |
June | 112.6 | 0.7 | 4.5 | 0.2 |
July | 113.7 | 0.9 | 5.2 | 0.7 |
Aug | 114.4 | 0.7 | 6.0 | 0.8 |
Sept | 115.0 | 0.5 | 6.7 | 0.7 |
Download this table Table 1: Output prices, index values, growth rates and percentage point change to the 12-month rate
.xls .csvTransport equipment provided the largest upward contribution of 2.23 percentage points to the annual rate (Figure 2) but had negative annual price growth of 0.8% in September 2021 (Table 2).
Despite showing negative annual growth, transport equipment provided an upward contribution to the annual rate because of the weight changes implemented as part of the move to annual chain-linking. More information is available in our Chain-linking in business prices article. You can find out more about how these rates are calculated within the contributions section of this bulletin.
Figure 2: Transport equipment provided the largest upward contribution to the annual rate
Output prices contribution to 1-month and 12-month growth rate, UK, September 2021
Source: Office for National Statistics – Producer Price Index
Notes:
- Contributions to the rate may not add up to the rate exactly because of rounding.
Download this chart Figure 2: Transport equipment provided the largest upward contribution to the annual rate
Image .csv .xls
Product group | Percentage Change | |
---|---|---|
1-month rate | 12-month rate | |
Food products | 0.3 | 2.6 |
Tobacco and alcohol (excl. duty) | -1.4 | 2.0 |
Clothing, textile and leather | 0.5 | 1.8 |
Paper and printing | 0.9 | 5.6 |
Petroleum products (excl. duty) | 1.5 | 61.7 |
Chemical and pharmaceutical | 0.1 | 9.3 |
Metal, machinery and equipment | 1.0 | 10.9 |
Computer, electrical and optical | 0.3 | 2.6 |
Transport equipment | 0.4 | -0.8 |
Other manufactured products | 0.4 | 6.2 |
All manufacturing | 0.5 | 6.7 |
Download this table Table 2: Output prices, growth rates
.xls .csvThe annual rate of output inflation increased by 0.7 percentage points from 6.0% in August 2021 to 6.7% in September 2021; this is the highest the annual rate of output inflation has been since November 2011.
Of the 10 product groups, eight displayed upward contributions to the change in the rate, with petroleum products providing the largest, at 0.33 percentage points (Figure 3). The annual rate for petroleum products increased by 11.2 percentage points from 50.5% in August 2021 to 61.7% in September 2021. Annual growth rates for this product group were being driven by coke and refined petroleum products for domestic market.
Figure 3: Petroleum made the largest upward contribution to the change in the annual rate
Output PPI, contribution to change in the annual rate, UK, September 2021
Source: Office for National Statistics – Producer Price Index
Notes:
- Contributions to the rate may not add up to the rate exactly because of rounding.
Download this chart Figure 3: Petroleum made the largest upward contribution to the change in the annual rate
Image .csv .xlsOn the month, the rate of input inflation was 0.4% in September 2021, down from 0.5% in August 2021 (Table 3).
All materials and fuels purchased (GHIP) | ||||
---|---|---|---|---|
PPI Index (2015=100) | 1-month rate | 12-month rate | Change in the 12-month rate (percentage points) | |
2020 Sept | 112.3 | 0.2 | -2.2 | 0.8 |
Oct | 112.8 | 0.5 | -1.1 | 1.1 |
Nov | 113.3 | 0.4 | -0.3 | 0.8 |
Dec | 114.8 | 1.3 | 0.8 | 1.1 |
2021 Jan | 116.1 | 1.1 | 1.9 | 1.1 |
Feb | 117.2 | 0.9 | 3.2 | 1.3 |
Mar | 119.0 | 1.6 | 6.1 | 2.9 |
Apr | 120.4 | 1.1 | 9.6 | 3.5 |
May | 121.8 | 1.1 | 10.3 | 0.7 |
June | 122.4 | 0.5 | 9.6 | -0.7 |
July | 124.0 | 1.3 | 10.4 | 0.8 |
Aug | 124.6 | 0.5 | 11.2 | 0.8 |
Sept | 125.1 | 0.4 | 11.4 | 0.2 |
Download this table Table 3: Input prices, index values, growth rates and percentage point change to the 12-month rate
.xls .csvThe annual rate of imported inputs was 4.2% in September 2021 (Table 4), down from 4.4% in August 2021.
Imported materials and fuels purchased (GD74) | Sterling effective exchange rate - month average (BK67) | ||||||
---|---|---|---|---|---|---|---|
PPI Index (2015=100) | 1-month rate | 12-month rate | Change in the 12-month rate (percentage points) | Sterling Index (Jan 2005=100) | 1-month rate | 12-month rate | |
2020 Sept | 115.1 | 0.8 | -2.5 | 1.9 | 77.2 | -1.2 | 0.8 |
Oct | 115.1 | 0.0 | -1.1 | 1.4 | 77.4 | 0.3 | -1.0 |
Nov | 114.6 | -0.4 | -0.7 | 0.4 | 78.2 | 1.0 | -1.8 |
Dec | 115.8 | 1.0 | 0.9 | 1.6 | 78.0 | -0.3 | -3.2 |
2021 Jan | 116.2 | 0.4 | 0.9 | 0.0 | 79.0 | 1.3 | -1.6 |
Feb | 115.6 | -0.5 | 0.1 | -0.8 | 80.6 | 2.0 | -0.1 |
Mar | 117.0 | 1.2 | 0.7 | 0.6 | 81.7 | 1.4 | 6.4 |
Apr | 118.4 | 1.2 | 5.4 | 4.7 | 81.3 | -0.5 | 4.1 |
May | 118.3 | 0.0 | 4.6 | -0.8 | 82.0 | 0.9 | 6.4 |
June | 118.7 | 0.3 | 4.4 | -0.2 | 82.0 | 0.0 | 6.6 |
July | 119.8 | 1.0 | 4.5 | 0.1 | 81.9 | -0.1 | 6.5 |
Aug | 119.3 | -0.5 | 4.4 | -0.1 | 82.0 | 0.1 | 5.0 |
Sept | 119.9 | 0.5 | 4.2 | -0.2 | 81.6 | -0.5 | 5.7 |
Download this table Table 4: Imported materials and fuels purchased and sterling effective exchange rate, index values, growth rates and percentage point change to the 12-month rate
.xls .csvThe largest upward contribution to the annual input inflation rate came from metals and non-metallic minerals, which contributed 4.32 percentage points (Figure 4) and had positive annual price growth of 19.8% in September 2021 (Table 5). This was mainly driven by basic iron and steel, and of ferro-alloys for domestic market.
Figure 4: Metals and non-metallic minerals provided the largest upward contribution to the annual rate
Input PPI, contribution to 1-month and 12-month growth rate, UK, September 2021
Source: Office for National Statistics – Producer Price Index
Notes:
- Contributions to the rate may not add up to the rate exactly because of rounding.
Download this chart Figure 4: Metals and non-metallic minerals provided the largest upward contribution to the annual rate
Image .csv .xls
Product group | Percentage change | |
---|---|---|
1-month rate | 12-month rate | |
Beverages and tobacco | -0.7 | 1.2 |
Fuel excluding Climate Change Levy | -3.7 | 21.0 |
Crude oil | 0.5 | 60.4 |
Home food materials | 0.4 | 3.9 |
Imported food materials | 1.5 | 2.1 |
Other produced materials | 1.0 | 16.4 |
Metals & non-metallic minerals | 0.5 | 19.8 |
Chemicals | 0.3 | 12.0 |
Other parts and equipment | 0.4 | -0.8 |
Other inputs | 0.0 | -0.9 |
All manufacturing | 0.4 | 11.4 |
Download this table Table 5: Input prices, growth rates
.xls .csvThe annual input inflation rate increased by 0.2 percentage points from 11.2% in August 2021 to 11.4% in September 2021. Crude oil displayed the largest upward contribution to the change in the rate, at 0.39 percentage points (Figure 5), with annual price growth of 60.4% (Table 5). The annual rate for crude oil increased by 10.8 percentage points from 49.6% in August 2021; this is the first time the annual rate has picked up for this product group since April 2021.
Figure 5: Crude oil provided the largest upward contribution to the change in the annual rate
Input PPI, contribution to change in the annual rate, UK, September 2021
Source: Office for National Statistics – Producer Price Index
Notes:
- Contributions to the rate may not add up to the rate exactly because of rounding.
Download this chart Figure 5: Crude oil provided the largest upward contribution to the change in the annual rate
Image .csv .xlsThe annual rate of inflation for the Services Producer Price Index (SPPI) was 3.6% in Quarter 3 (Jul to Sept) 2021, up from 2.0% in Quarter 2 (Apr to Jun) 2021 (Figure 6). This is the highest the rate has been since September 2008, but is partly driven by a base effect as prices fell by 0.5% in quarter 3 2020.
Figure 6: The annual rate of inflation for the SPPI rose in Quarter 3 (Jul to Sept) 2021
SPPI, UK, Quarter 3 (Jul to Sept) 2011 to Quarter 3 (Jul to Sept) 2021
Source: Office for National Statistics – Services Producer Price Index
Download this chart Figure 6: The annual rate of inflation for the SPPI rose in Quarter 3 (Jul to Sept) 2021
Image .csv .xlsThe quarter-on-quarter growth of services sold by UK companies was 1.1% in Quarter 3 2021, up from 0.9% in Quarter 2 2021 (Table 6).
UK | |||||
---|---|---|---|---|---|
Percentage change | |||||
SPPI Index (2015=100) | 1-Quarter | 12-months | Change in the 12-month rate (percentage points) | ||
2020 | Q3 | 107.1 | -0.5 | 0.1 | -1.1 |
Q4 | 107.9 | 0.7 | 0.7 | 0.6 | |
2021 | Q1 | 108.9 | 0.9 | 1.4 | 0.7 |
Q2 | 109.9 | 0.9 | 2.0 | 0.6 | |
Q3 | 111.0 | 1.1 | 3.6 | 1.6 |
Download this table Table 6: Services Producer Prices
.xls .csvThe largest upward contribution to the annual rate came from professional, scientific and technical services, at 5.00 percentage points (Figure 7), with an annual price increase of 5.1% (Table 7).
Transportation and storage services had the highest annual growth rate of any component of SPPI in Quarter 3 2021, of 5.8%, but provided a downward contribution of 2.08 percentage points to the annual rate. This was because of weight changes implemented as part of Services Producer Price Inflation adjustments for coronavirus (COVID-19).
Professional, scientific and technical services also provided the largest upward contribution to the monthly rate, at 0.54 percentage points. Smaller upward contributions on the month were seen in administrative and support services (0.26pp), and transportation and storage services (0.11pp), with the latter driven by freight transport services by road.
Figure 7: Professional, scientific and technical activities made the largest upward contribution to the SPPI annual rate
SPPI, contribution to 1-quarter and 12-month growth rate, UK, Quarter 3 (Jul to Sept) 2021
Source: Office for National Statistics – Services Producer Price Index
Notes:
- Contributions to the rate may not add up to the rate exactly because of rounding.
Download this chart Figure 7: Professional, scientific and technical activities made the largest upward contribution to the SPPI annual rate
Image .csv .xls
Service group | Percentage change | |
---|---|---|
1-quarter | 12-months | |
Repair and maintenance of motor vehicles | 1.7 | 3.3 |
Transportation and storage | 0.6 | 5.8 |
Accommodation and food | 1.2 | 5.1 |
Information and communication | -0.1 | -0.4 |
Real estate activities | 0.4 | -0.3 |
Professional, scientific and technical activities | 1.7 | 5.1 |
Administrative and support services | 1.4 | 2.0 |
Education | 0.0 | 0.0 |
Other services | 0.0 | 3.8 |
SPPI | 1.1 | 3.6 |
Download this table Table 7: SPPI, 1-quarter and 12-month percentage change
.xls .csv3. Producer price inflation data
Producer price inflation time series
Dataset | Released 20 October 2021
A comprehensive selection of data on input and output indices. Contains producer price indices of materials and fuels purchased and output of manufacturing industry by broad sector.
Output and input producer price inflation: contributions to the 12-month rates
Dataset | Released 20 October 2021
Contributions to the 12-month rates of input and output producer price inflation by component and overall rates.
Producer price inflation
Dataset MM22 | Released 20 October 2021
UK price movement data at all manufacturing, aggregated industry and product group level. Data supplied from individual manufacturers, importers and exporters. Monthly, quarterly and annual data.
4. Glossary
Weight
This is the importance of the price of interest relative to other prices collected. With annual chain linking this is updated every year using business turnover data.
Index value
Price level in a specific basket of goods.
Annual growth rate
The annual inflation rate.
Link factor
A smoothing factor applied to create a continuous series following a weights change.
Contribution
A measure of influence the index has on the overall growth rate. This depends on both the magnitude of the weight and the inflation rate. A positive contribution is an index that is driving a change in the annual growth rate value. Where the contribution is positive but the growth is negative, this indicates that the index is reducing the annual growth rate (for example the growth rate would be higher if this index had a lower weight).
Producer price inflation
Changes in the prices of goods bought and sold by UK manufacturers, including price indices of materials and fuels purchased (input prices) and factory gate prices (output prices).
Output prices
The factory gate price (output price) is the amount received by UK producers for the goods that they sell to the domestic market. It includes the margin that businesses make on goods, in addition to costs such as labour, raw materials and energy, as well as interest on loans, site or building maintenance, or rent.
Input prices
The input price measures the price of materials and fuels bought by UK manufacturers for processing. It includes materials and fuels that are both imported or sourced within the domestic market. It is not limited to materials used in the final product but includes what is required by businesses in their normal day-to-day running, such as fuels.
Services producer price inflation
Quarterly estimates monitoring the changes in prices charged for services provided to UK-based customers for a range of industries.
Back to table of contents5. Measuring the data
Producer Price Inflation (PPI) uses contributions to identify how indices influence the overall inflation rate. This section gives additional information on the calculation and how to interpret it.
Example scenarios
The following gives examples of how weight and inflation rate changes most commonly affect the contribution. In PPI, the weights usually have greater influence on the contribution as these tend to show greater change than the annual inflation rate.
Decrease in weight and in inflation rate - contribution is negative
Decrease in weight, increase in inflation rate - contribution is usually negative
No change in weight or inflation rate - no change
No change in weight, increase in inflation rate - no change
Increase in weight, decrease in inflation rate - contribution is usually positive
Increase in weight, no change in inflation rate - contribution is positive
Increase in weight, increase in inflation rate - contribution is positive
Contributions are calculated using the following formula:
Quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Producer Price Index (PPI) Quality and Methodology Information report and the Services Producer Price Indices (SPPI) Quality and Methodology information report.
Other useful documentation for the Producer Price Index (PPI) and the Services Producer Price Index (SPPI) are:
Sterling effective exchange rate
The sterling effective exchange rate measures changes in the strength of sterling relative to basket of other currencies. The sterling effective exchange rate is only indicative of the rates applied to producer prices. This is because the sterling effective exchange rate is a trade weighted index that represents all UK trade, whereas producer prices reflect transaction in the manufacture sector.
Back to table of contents6. Strengths and limitations
Strengths
These data provide users with valuable insight into the changes in the process of goods and services bought and sold by UK manufacturers.
Our data is very comprehensive, covering many products at a much greater level of detail than other surveys.
Limitations
Some products are produced by only a small number of manufacturers, meaning that there may not be enough manufacturers for a detailed and robust analysis and the sector may be volatile, requiring some estimation.
The data can be revised for 12 months.
The data for the latest two months of the Producer Price Index (PPI) and two quarters of the Services Producer Price Index (SPPI) are provisional.
Coronavirus in September 2021
Response rates for the domestic PPI and Export Price Index (EPI) show an increase between August 2021 and September 2021, whereas the response rates for the Import Price Index (IPI) show a decrease between August 2021 and September 2021 (Table 8). The response rate for SPPI shows an increase between Quarter 2 (Apr to June) 2021 and Quarter 3 (July to Sept) 2021 (Table 9).
Weighted response | |||
---|---|---|---|
PPI (domestic) | IPI | EPI | |
September 2020 | 77.6 | 74.0 | 68.7 |
October 2020 | 77.2 | 72.4 | 65.1 |
November 2020 | 77.5 | 74.7 | 68.4 |
December 2020 | 73.5 | 71.9 | 76.6 |
January 2021 | 74.8 | 70.7 | 58.7 |
February 2021 | 75.3 | 74.2 | 62.3 |
March 2021 | 73.9 | 75.5 | 65.4 |
April 2021 | 79.0 | 72.6 | 60.3 |
May 2021 | 75.5 | 77.1 | 62.7 |
June 2021 | 77.1 | 75.3 | 64.8 |
July 2021 | 71.1 | 68.2 | 70.7 |
August 2021 | 73.0 | 67.9 | 72.8 |
September 2021 | 73.3 | 67.1 | 73.8 |
Download this table Table 8: Overall effective response rates at time of first publishing percentage
.xls .csv
Weighted Response SPPI | |
---|---|
2020 Q3 | 75.3 |
Q4 | 74.9 |
2021 Q1 | 73.2 |
Q2 | 71.0 |
Q3 | 74.2 |