Glossary:Services producer price index (SPPI)
The services producer price index, abbreviated as SPPI, is a business-cycle indicator which measures the gross change in the trading price of services including e.g. freight and passenger transport, postal services, accomodation and food services, information and communciation services, computer programming, consultancy services, legal and accounting services, architecture and engineering, advertising, office support, security services etc. In general the NACE sections , H, I, J, L, M, and N are covered by SPPIs. The only exceptions in these areas are veterinary services (M75), services of head offices (M70.1), and scientific research services (M72).
Public services are excluded, as for those services (for example health and education) the notion of price is not obvious and the ways they are provided are very different from country to country. Moreover, STS does not cover banking and insurance activities and thus also no prices for such services.
The Commission Implementing Regulation (EU) No 2020/1197 of 30 July 2020 implementing Regulation (EU) No 2019/2152 of 27 November 2019 (European Business Statistics Regulation) introduced SPPIs for a large number of services industries that were not covered by the former STS Regulation.
Similar to the industrial producer price index, the SPPI is an output index – it measures price changes from the perspective of the seller. The SPPIs are used as an aspect of output for the seller and as a cost factor for the buyer
The SPPI covers services provided for all uses, i.e. for intermediate as well as for final consumption. However, the economic service activities for which the SPPI is calculated (see above) are mainly consumed by other businesses for the production of their own goods and services. Inflation experienced by consumers is measured by the harmonised index of consumer prices.
The SPPI is an important measure of inflation as services account for over half of modern economies. It is also employed to analyze the origins of inflation since it shows which services consumed by other businesses might be the sources of price increases. The SPPI is used as well as a deflator for services turnover (measured in current prices) and thus allows calculating a volume indicator for services similar to the volume index of industrial production.
The SPPI is calculated on a quarterly basis, EU data are available from 2006 on.
Further information
- Methodological guide for developing producer price indices for services
- OECD - Services Producer Price Indices: publications and methodological documents
- Service producer price indices (SPPIs): a new European economic indicator - Statistics in focus 103/2008