Background Notes

Services Producer Price Index  The Services Producer Price Index (SPPI) is made up of a set of individual price indices that measure changes in the average level of prices charged by producers for a selected range of services supplied to businesses and government. In most cases these services are provided to business customers only and so individual price indices should not be considered indicative of more general price trends in the economy.  The index covers transaction costs from business to business and excludes consumers who are covered in the Consumer Price Index (CPI). 

The individual price indices are aggregated together to create a “services  industry” index that is limited in coverage.  The SPPI is experimental, under development and may be subject to methodological improvement. Figures should therefore be treated as provisional and subject to revision.  The index is published to engage users in the ongoing development of the methodology.

Relevancy There are two main uses of SPPI; as a short-term indicator of the business cycle and to provide deflators for national accounts.

Coverage The services producer price index covers a limited range of service industries as set by the European Parliament and Council Regulation (EC) No 1165/1998 (consolidated). 

The following industries are selected (based on the Nace Rev 2 Classification):

N – Administrative and Support Services Activities
78 Employment activities
80 Security and investigation activities
81.2 Industrial and building Cleaning

At present the quality of indices for the telecommunications (61) and information service activities (63) are deemed insufficient for publication. 

The published index accounts for approximately 43% of the total value of the traded services sector, excluding Wholesale and Retail Trade, when measured by sales.

Nace Classification The business activity classifications used in this Statistical release are based on the Statistical Classification of Economic Activities in the European Community i.e. Nace Rev 2.  The descriptions of particular NACE Rev 2 sectors are shown in abbreviated form in the release.  For further information on the NACE Rev 2 classifications, visit the CSO website http://www.cso.ie/px/u/NACECoder/NACEItems/searchnace.asp

Scope  Regulation (EC) No 1165/1998 (consolidated) requires Member States to provide data on the change in price of services within the business sector.  In most cases the CSO collects data on prices charged to Republic of Ireland businesses and government. In several instances prices are collected on the basis of prices charged to all sectors i.e. “Air transport” and “Postal activities under universal service obligation” as these are representative of prices charged to Business customers.

Price Collection All indices in the series are based on prices collected on a quarterly basis, using either the average price per quarter or the price on the 15th of the middle month of the reference period.

Prices used in the compilation of these indices are: 

Exclusive of VAT

Inclusive of surcharges (such as for fuel)

The Air Transport index is constructed using data collected by the Consumer Price Section.

The Employment and Human Resource Activities index is constructed using a combination of survey data  and data from the Earnings, Hours and Employment Cost Survey.

Weights  The SPPI has been rebased to 2010 = 100.  Weights at Nace Rev2 for 2010 were estimated by the SPPI Section primarily using data from the CSO Annual Services Inquiry.  Weights are “gross” – they are based on turnover from sales to all sectors, including non-resident.

Methodology    More information on SPPI’s is available from the Eurostat Methodological guide for developing producer price indices for services which can be viewed at http://www.oecd.org/std/prices-ppp/eurostat-oecd-methodological-guide-for-developing-producer-price-indices-for-services-9789264220676-en.htm Additional methodological information can be found on the website of the Voorburg Group on Services Statistics at http://www4.statcan.ca/english/voorburg/

Calculating percentage changes in the index The movement of the SPPI is expressed as percentage change, rather than a change in index points, because index point changes are affected by the level of the index in relation to its base period, whereas percentage changes are not.                                                            

The example below illustrates the computation of a percentage change:

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