IBGE starts, on April 5, to publish a new indicator, the Producer Price Index (IPP)...

IBGE starts, on April 5, to publish a new indicator, the Producer Price Index (IPP), monthly. 2010 complete results, data from January and February of 2011 and the main methodological characteristics will be presented. The index measures the development of “factory gate” prices, excluded taxes or freight, for 23 manufacturing industry sectors.   The survey broadens the analysis of the development of prices in the country.  The table below shows the publishing calendar for the IPP in 2011, also available at www.ibge.gov.br/home/estatistica/pesquisas/calendario.php.

In order to explain how the new index is estimated and its importance to journalists, two seminars will be held: one, this Monday (28/03), at 9:30 am, at IBGE headquarters in Rio de Janeiro; and the other, on Wednesday (30/03), at 10 am, at IBGE Unity of São Paulo.  The seminars are free and, in order to enroll, journalists may send an email to comunica@ibge.gov.br.

For companies, the IPP will increase the power of analysis, since it considers price changes from suppliers, clients and the company’s strategy within its own sector.  For the government, the IPP will expand the array of indicators that help design the economic policy.  For IBGE, data will integrate the set of indicators used to measure the Gross Domestic Product (GDP).

The IPP is restricted to the manufacturing industries, a set of companies that process raw materials into products.  23 sectors are covered: food, motor vehicles, petroleum products and biofuels, other chemical products, primary metallurgy, machines and tools and computers, electronic products, among others.  For the future, the prediction is that results from agriculture and livestock, mining and quarrying industry, civil construction and services be aggregated.

IPP data collection is conducted every month by means of an Internet questionnaire, protected by modern encryption tools. 1.400 companies monthly answer questions about 320 selected products, generating 5.000 monthly quotations.  That panel accounts for approximately 68% of the Brazilian industrial sales in 2007. Published numbers may be slightly altered, as companies can review data or release prices not previously informed. 

Month to month, month/same month a year ago and month/December of the previous year (accumulated in the year) changes will be released monthly.  

Studies for the elaboration of this index started in 2001 and the pilot project was ready in 2006, with specific questionnaires for each product surveyed.   The physical and commercial aspects of these products were defined in order to avoid that some changes in characteristics (launch of fashion collections, for example) be confused with changes in prices.  The indicator utilizes the National Classification of Economic Activities (CNAE) 2.0, with an additional opening in the chemical industry.