|Unit||Index 2010=100, NSA|
|Adjustments||Not Seasonally Adjusted|
The producer price index measures monthly variations in the prices of goods shipped by industrial producers within the domestic market. Price indices are available for all items, by stage of processing (i.e. raw, intermediate, finished goods), special groups (i.e. foods, energy, exclusionary indices), and basic groups. The data are not adjusted for seasonality.
The producer price index is often used as an indicator of economic conditions, a deflator, and as a measure of inflation used for economic analysis and policy-making.
To obtain pricing information commodities are selected from shipments. These commodities are selected based on the following criteria: (1) value of shipments (at least 1/10,000 and 1/2000 of the total universe); (2) continuity of price data over a period of time; (3) representative price movement within a similar group. The producer shipment price of these commodities is collected and compiled in person, via phone call, emails, and post. In the case with agricultural, forestry and marine products, the auction prices of large wholesale markets are used as it is difficult to report producer shipment price for these groups.
The Laspeyres formula is used to aggregate basic commodity indices with weights based on annual shipment values. Weights are calculated permillage by summing up the transaction amounts of the selected items and the similar items whose amounts fall short of the cutoff standards and dividing this number by the universal transaction amounts.
The data are classified according to Korea Standard Industrial Classification (KSIC).
-Price Indexes are used to measure movements of prices, and not to present an absolute price level.
-Prices of Agricultural, Forestry and Marine products are those decided after bidding in the wholesale markets, rather than farmers' or fishermens' selling prices.
-PPI can be compared with the Consumer Price Index, but cannot be used to measure margins at the stages of producer and retail sales.