The producer price index presents a more textured picture of inflation in the economy than the consumer price index, writes Patrick Kelly WHAT products are produced in SA, what prices do producers charge for these products, and how do these prices change over time?These are among the questions that Statistics SA’s producer price index (PPI) attempts to answer.The PPI is often viewed as a poor cousin to the more high-profile consumer price index (CPI) because the PPI is mainly used by businesses as a contract price escalator and also as an input into other economic data, such as the gross domestic product (at constant prices) — and not as a general measure of inflation and a monetary policy target — which the CPI is.In fact, the PPI presents a more textured picture of inflation in the economy than the CPI does because it reflects changes in prices charged by producers across more than 100 diverse industries. And while it is possible to see households as more or less homogeneous in wh...
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