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Outline of Input-Output Price Index of the Manufacturing Industry by Sector (IOPI, 1995 base)

March 2005
Bank of Japan
Research and Statistics Department

1. Purpose and uses

The IOPI focuses on the prices of products in the manufacturing industry. The IOPI is compiled using the prices of goods for production as the Input Price Index and the prices of produced goods as the Output Price Index. The IOPI also compiles the Output/Input Price Ratio Index, which is calculated by dividing the Output Price Index by the Input Price Index. The main purposes of the index are: 1) facilitating analyses of the relative price developments between raw materials and fuel & energy used for production in the manufacturing industry, and manufactured goods; 2) facilitating analyses of the impact of price developments among sectors in the manufacturing industry; 3) providing "deflators" that transform nominal output values into real quantities for the less-aggregated levels (e.g., Commodity group) of indexes.

2. Classification and weights

The Input Price Index covers raw materials and fuel & energy consumed in production processes (both domestic products and imports). The Output Price Index covers manufactured products (both domestic products and exports).*

  • Weights within the grouping "Commodity group" (described below) are calculated by using the weights of Commodity indexes in the 1995 base Wholesale Price Index (WPI).

For the Input Price Index, the weights are based on the purchasers' price values of the intermediate sector for the manufacturing industry during the base year 1995 of the I-O Tables, published by the Management and Coordination Agency (the Ministry of Public Management, Home Affairs, Posts and Telecommunications since January 2001). For the Output Price Index, the weights are based on the producers' price values of domestic products for the manufacturing industry during the base year 1995 of the I-O Tables.

The IOPI has two layers of sector classifications: the Manufacturing industry sector and the Aggregated sector. The former consists of one category and the latter consists of 14 categories. Each sector has three layers of commodity groups: Aggregated major commodity group, Major commodity group and Commodity group (except for the Aggregated sector in the Output Price Index, which has only Major commodity group and Commodity group).

3. Base year for the index and the weight calculation

The base year is 1995 for both the index calculation and the weight calculation.

4. Price data (Selection of Commodities)

The price collection for the IOPI was changed from the 1995 base index, when original price collection was abolished and Commodity indexes in the CGPI became the sole source for the IOPI price data. The total number of selected Commodities amounts to 1,228 for the Input Price Index and 1,217 for the Output Price Index. The IOPI includes the consumption tax, except for the prices of exports in the Output Price Index.

5. Index formula

The index formula is the fix-weighted Laspeyres formula. For details, refer to column 7, "Index formula for the CGPI."

6. Publication

In principle, from the December 2002 index, the IOPI is released on the eighth working day of the second month after the index is compiled (at the same time as the publication of the final CGPI figures). Periodic retroactive revisions of released indexes are implemented twice a year in April and October, when the February and August indexes are released.

7. Note

From the December 2002 index, the 1995 base IOPI was revised in accordance with the revision of the WPI from the 1995 base to the 2000 base (switchover of the 1995 base WPI into the 2000 base CGPI).