Updated Inputs to Industry Producer Price Indexes
Effective with the release of Producer Price Index (PPI) data for January 2015 on February 18, 2015, the Bureau of Labor Statistics updated the weights used to calculate the PPI industry input indexes. BLS also applied improved methods to the industry input indexes and expanded the number of industries for which these indexes are calculated.
These updates resulted in several changes to table 14 of the PPI Detailed Report. That table previously only presented data for material and supply inputs to construction industries. Since 1986, BLS has published indexes for material and supply inputs to construction industries. In July 2014, BLS also began publishing experimental input indexes for the following industries:
In January 2015, BLS started publication of additional input indexes for the following industries:
While BLS has always calculated the input indexes for these nine industries using the methods described in the next section of this article, beginning with January 2015 data, the input indexes for construction industries also reflect the new methodology.
Methodology and Weighting
Industry input indexes measure the average change in prices for domestic inputs consumed by industries; these indexes exclude capital investment and labor. BLS determines the products to include in an industry input index based on the Bureau of Economic Analysis (BEA) Use of Commodities by Industries table. This table provides, on an industry by industry basis, the set and dollar value of products that each domestic industry consumes during production.  BLS calculates weights for each commodity in an industry input index based on this table and revenue data from the U.S. Census Bureau. The gross weight of each commodity in an industry input index equals the share of the total commodity’s value consumed by the industry, multiplied by the Census revenue for that commodity. BLS then converts the gross weight to a net weight by removing the portion of the input commodity’s value that was produced by the industry. BLS uses the BEA Make of Commodities by Industries table to determine the portion of the commodity’s value that is produced by the industry.
Prior to the January 2015 PPI release, weights for industry input indexes were based on 2002 data from the BEA Input-Output Accounts and 2007 economic census data from the U.S. Census Bureau. BLS has updated to 2007 the portion of the industry input index weights derived from the BEA Input-Output Accounts. The portion of the weights derived from census data will continue to be based on 2007 information. 
Since 1986, BLS has calculated the input indexes for construction industries from industry-based primary product PPIs. These industry-based indexes approximated commodity-based producer price indexes. (Commodity indexes track price change for goods and services regardless of the industry of origin.) The industry input indexes for construction and all other industries now are calculated from commodity-based producer price indexes. It is more appropriate to use commodity indexes than industry indexes because industries consume commodities as inputs to production.
Also since 1986, the input indexes for construction industries only included goods. With the publication of January 2015 data, all industry input indexes include services and construction inputs, in addition to goods inputs.
Coverage and Publication Structure
As of January 2015, BLS publishes input indexes for the industries shown in Table 1.
The long-standing indexes for material and supply inputs to construction industries will remain intact. Titles and index codes have changed to conform to the new table structure. New indexes capture specific goods inputs, and overall and detailed services inputs. Appendix A provides a title and coding concordance between the historical inputs to construction industries indexes and their successor indexes within the updated table structure.
PPI industry input indexes data are available in table 14 of the PPI Detailed Report or through our data-retrieval tools. For help retrieving data or for additional information, email email@example.com or call the Division of Industrial Prices and Price Indexes, Section of Index Analysis and Public Information, at (202) 691-7705.
 BLS uses a 0.5-percent cutoff rule for determining the products to include in an industry input index. Products that comprised less than 0.5 percent of the total inputs to the industry were excluded from the index. The 0.5-percent cutoff significantly reduces the work of building and maintaining the industry input indexes; research shows that the truncated inputs have almost no effect on index movements. BLS uses a similar 0.5-percent cutoff to construct the Final Demand-Intermediate Demand indexes. ↩
Last Modified Date: February 18, 2015