Institut National de la Statistique et des Etudes Economiques (the French NSI)

Direction des Statistiques d’Entreprises \ Département des Statistiques de Court Terme \ Division des Indices de Prix à la Production.

(Directorate of Business Statistics\ Department of Short Term Statistics\ Division of Producer Price Indices).

INSEE

Division IPP - timbre E310

88 avenue Verdier

CS 70058

92541 Montrouge cedex

France

Name of indicator : 

Producer Price Indices in industry.

Source of data :

Producer Price Indices in industry are the results of the survey named « Observation of Prices in Industry and SErvices (OPISE) »

Scope of indices : 

The three main indicators calculated are the following :

• The industrial producer price indices for the French market : they measure the development of transaction prices of goods and services that come from French industrial activities and are sold on the French market. The measurement is conducted at "basic prices" (output prices of the activity) and at "market prices" (purchaser's price of the product)
• The industrial producer price indices for foreign markets : they track the development of transaction prices (converted to euros, therefore including exchange effects) of goods and services from the French industry activity sold on foreign markets. Thus, what is involved here is "exported production" rather than "exports" which also include re-exports or intermediations by traders.
• The combination of the two indices above determines the industrial producer price indices for all markets (French market and foreign markets) 

Firms are classified according to the NACE rev.2 (European Community Classification of Activities, Revision 2),

Products are classified according to the French Product Classification (Classification des Produits Française : CPF rev. 2.1), a French adaptation of the European Classification of Products by Activity (CPA rev. 2.1), but using a more detailed breakdown.

Prices are observed at a very fine level of product detail, but the indices are released only at the four-digit CPF level and above.

Activities covered

The theoretical scope in terms of activity for industry corresponds to CPA 2008 sections B to E (hence, larger than requested by European EBS regulation). The divisions, groups ou classes in the scope of PPI but not sampled are imputed, so that our "total industry" is representative of the full scope of industry for the national accounts.

Coverage of theoretical scope in terms of activities

The OPISE survey covers 96.0% of PPI on the French market according to the European scope and 96.0% of total industry (sections B to E) in terms of production of covered activities; 94.6% of PPI on foreign markets and 95.6% of PPI on all markets according to the European scope (respectively 94.1% and 95.5% on total industry).

Size classes covered

Cut-off technique for sampling firms.

Firms with turnover below 3 million € in a CPF4 product family are generally excluded from the survey.

List and definition of variables :

Producer prices exclude VAT and taxes on the products, but include discounts.

They are consistent with turnover of firms by products.

Intra-group transaction prices are included in the survey scope.

The PPI are calculated with the same technique (and rely generally on the same sample) for domestic and non-domestic markets.

Field surveyors regularly contact firms in order to define elementary products that will be followed by the OPISE survey. The selected products are representative of a product family. In practice, they are generally the products with the biggest turnover within each family.

Planned changes in information collected : None.

Accounting conventions : The reported price usually corresponds to the average price of the product sold over one calendar month.In principle, only series whose response rate to the OPISE survey or Consumer Price Indices
exceed 50% are disseminated.

Reporting unit: Firms. Sometimes several departments of a single firm (according to its organization) or a head office of a group for its affiliates.

Observation unit(s): Representative products (CPA 4-digit) sold by firms.

The statistical population is defined by Structural Business Statistics: 352,000 legal units for total industry (sections B to E) for 2022, representing a turnover of about 1,3 billion euros.

The survey covers French economic territory, including Corsica and overseas departments (Guadeloupe, French Guyana, Martinique, Mayotte and Réunion). Conversely, overseas territories (New Caledonia, French Polynesia, Saint Pierre and Miquelon, Wallis and Futuna) are excluded.

Date of first use as a source: the OPISE survey was first used at the beginning of the 90’s for some CPA 4-digit level headings. The index for the whole industry was first published in 2000.

It is necessary to distinguish two different levels of aggregation: aggregation of representative transactions to a CPF rev.2.1 level and aggregation of CPF rev.2.1 levels to a higher CPF rev.2.1 level. These two levels of aggregation are called respectively basic aggregations and higher aggregations.

For basic aggregations, weights correspond to the turnover of the year preceding the field officer's contact.

For higher aggregations, indices are chain-linked. Weights used for compiling year Y indices stem from year Y-2 national accounts when Y>=2012, and from Y-1 national accounts when 2006<=Y<=2011. Before 2006, weights correspond to 2005 national accounts. The reference of production price indices released is 100 in 2021 (annual average), so indices are labeled "base 2021".

Indices (reference 100 in 2021) on prices expressed in euros.

The periodicity is monthly

Legal basis :

The producer price indices are ruled by the European Business Statistics (EBS) Regulation (EU) 2019/2152 on 27 November 2019, followed by the Commission Implementing Regulation 2020/1197.

A yearly visa from the French Minister of economics is given, according to the 1951 law about statistics (2024 visa: 2024M002EC.

It also covers import prices of industrial products, services producer price indices and buildings’ maintenance and improvement work price index (~ division 43).

Obligation on units to provide data : The survey is compulsory. Non-respondents are sometimes fined.

Planned changes in legal basis, obligation to respond and frame used : None.

The "Centre d'études économiques du bois" ("CEEB", ie Economic studies center on wood) and "Alliance des Minerais, Minéraux et Métaux" ("A3M", ie French union of steel) are in charge of collecting prices in their activities (classes 16.10 and 24.10 respectively).

The data is shared with Eurostat, following the EBS regulation.

The producer price indices are regulated by the 1951 law about statistics.

Every surveyed firm is provided with information about statistical confidentiality.

Confidential data are not published. That happens in two cases: either there are less than three units to produce the index or one single unit represents more than 85% of the turnover in the group of goods.

Producer price index are published around m+30 (last working day of the following month).

A monthly calendar is produced for the four following months.

It can be found on the INSEE website : https://www.insee.fr/en/information/2107811?debut=0

Indices disseminated on the Insee website and data transmitted to Eurostat are strictly identical.

Data are transmitted to Eurostat the day before the national release (under "embargo"). The transmission to Eurostat is made using the SDMX format.

Government has no access to data under embargo.

Monthly.

A 5-page "Informations Rapides" can be found online on the INSEE website.

This release covers domestic PPI, non-domestic PPI and import prices.

National paper publications: No longer available on paper.

National electronic dissemination: A 5-page "Informations Rapides" is published on the INSEE website:
both in French: https://www.insee.fr/fr/statistiques?debut=0&theme=30&conjoncture=44
and in English: https://www.insee.fr/en/statistiques?debut=0&theme=30&conjoncture=44

In base 2010, series can be accessed on https://www.insee.fr/en/statistiques/series/102776019.

In base 2015, series can be accessed on https://www.insee.fr/en/statistiques/series/108665892.

In base 2021, series can be accessed on https://www.insee.fr/en/statistiques/series/117384650.

Researchers can request microdata access, but they need to come on site, with a special procedure.

Data are also available on https://www.insee.fr/en/information/2512785.

Data are sent to Eurostat the day before the national release.

Some methodology can be accessed on: https://www.insee.fr/en/metadonnees/source/s1133.

The complete and detailed methodology is also available on : Producer Price Indices | Insee

A "quality file" for year 2014 is available in French on the Insee website: https://www.insee.fr/fr/metadonnees/source/indicateur/p1640/gestion-qualite

The European statistics code of practice is implemented as far as possible. In particular, selective editing is applied in accordance with the EDIMBUS manual.

The main quality problems are linked to one-off products, misunderstandings between firms and Insee about some elementary price series and non-response.

The DQAF of French PPI can be found on the IMF framework: http://dsbb.imf.org/pages/sdds/DQAFBase.aspx?ctycode=FRA&catcode=PPI00

These indices allow:

- Economists to evaluate and analyze economic trends ; 

- National accountants to deflate production value that comes from structural business statistics and as such to carry out the breakdown between development of the activity in volume (quantity, quality, structure effect) and evolution of prices (“price-volume split”). Ultimately, they can then track the evolution of Gross Domestic Product and National Account aggregates in volume ;

- Companies and local communities for contract indexation ;

- International organisations such as Eurostat to compare economic statistics of Member States.

Several complaints are expressed every year about some PPI series by firms that use them for contract indexation.

OPISE survey covers CPA4 industries that amount in 2022 to:

- 96.0% of the production sold to the French market, according to the European scope.

- 94.6% of the production sold to foreign markets, according to the European scope.

- 95.6% of the production sold to all markets, according to the European scope.

Non domestic market is split between euro zone and non euro zone.

The main sources of error are the following ones:

- Non probability-sampling error (a "cut-off" technique is used);

- Aggregation of indices based on too few representative products;

- Misunderstandings concerning price questionnaires;

- Non-response;

- Errors in data processing;

- Handling of quality changes in products;

- Handling of new products entering and old ones exiting from the market;

- Measurement difficulties in unique/one-off products;

- Uncertainty of imputation models.

The revision of "total industry" production price indices is rarely higher than 0.2% a month in absolute terms. No bias on revisions has been observed.

There is no sampling error strictly speaking as France uses a cut-off technique to select firms.

For every covered CPF4 product family, main firms are surveyed. This could be a source of bias. Nevertheless, if main firms are price-maker, and others are price-taker, the bias should be low.

Multiple representative products may be identified when the field surveyor contacts a firm. Federation of employers are questioned by Insee about under-coverage and over-coverage, so that both are limited when an activity is "refreshed". As time goes by, under-coverage may grow: new firms are created and they are not surveyed, new products are sold, and they are seldom surveyed (firms are able to "change products"', but they don't do it frequently).

The list of representative products are discussed between firms and field surveyors: this helps improve the response rate and the quality of the survey. Then, firms fill prices every month, on an Internet (or paper) form. If necessary, field surveyors may contact the firm long after the initial choice of products.

The main reasons for non-response are: representative products imperfectly defined, no sale during the period under review, difficulties to estimate prices because of an unsuitable information system, change of contact inside firms, momentary "oblivion"... Non-responses are estimated through close groups of products, so as to limit their impact on aggregates.

The weighted response rate is approximately 81%. Some actions to increase the rate of response have been implemented. Web-based data collection offers a quicker response time and is favoured. In 2023 approximately 98% of survey responses were sent by Internet.

Data editing focus on price changes that have the biggest impact on aggregates. Consequently, other errors may not be seen.

No specific models are used.

Timeliness: Indices are released near the 30th of the month following the reference month. They are provisional for three months. All markets, fine details and aggregates are available on same time.

Timetable of data collection: Questionnaires for month M prices are sent at the end of month M. The response is to be made before the 10th of M+1. For internet respondents, if they do not complete the questionnaire, they can receive up to two reminder e-mails. The first is around the 10 of M+1. If they still do not answer, the second is sent to them around the 20 of M+1. For paper respondents, only one follow-up letter is sent around the 15 of M+1. If necessary, a follow-up call can be made until the deadline.

French release dates are always respected, with one exception in January 2009 due to a strike of Insee's civil servants.

The provision of price series to Eurostat is generally punctual, but some technical problems induced an exceptional delay at the end of October 2013 (data were finally sent on the beginning of November 2013, indeed).

Overseas departments are included in French economic territory, whereas the other overseas territories are excluded.

PPI are aggregated and chain-linked since January 2005. Before, they have been backcasted with the help of PPI in base and reference 2005, with a fixed base technique, relying on weights of year 2005.

Dissemination of information that support statistical cross-checks and provide assurance of reasonableness: For D35.3, the same data are gathered both for PPI and for CPI.

Confrontation with other data sets: National Accounts confront PPI (total, domestic, non domestic), CPI and import prices and find some inconsistencies. But they can be due to value amounts too, and most often these inconsistencies are not reported externally to National Accounts team.

PPI are used to compile quarterly and yearly national accounts, and monthly industrial production in volume.

For yearly national accounts, "implicit PPI" (that is to say the ratio production in value / production in volume) may differ from yearly PPI when uses and supply balance requires to do so.

No discrepancies between aggregates and sub-aggregates have been observed.

The cost of both PPI and import prices for Insee is about 7.5 Full Time Equivalent of a category A statistician, 21 Full Time Equivalent of category B or C civil servants, plus 7 field surveyors (assimilated to category A).

The average burden is estimated at 15 minutes per month for a respondent.

The policy of revision is strictly identical both for national release and for data transmitted to Eurostat.

The revisions are announced at the time of change (an ‘r’ near the index shows that it has been modified since the previous release).

Scheduled revisions

Indices are released near the 30th of the month following the reference month (M+30).

Firms are still able to change their price for the reference month for three months, so that indices may be updated at M+30, M+60 and M+90 respectively. 

They also may be revised when CPF4 weights are updated (usually in May, so that indices from January to March may be revised with the May publication).

Non-scheduled revisions

Afterwards, indices are only revised if a big mistake is discovered. Then, a specific note is published on website: https://www.insee.fr/en/information/2886952 (or in French: https://www.insee.fr/fr/information/2862832), commenting the reason why and the impact.

Our press release provides the revision brought to the aggregates' price changes for the 3 previous months. 

Generally, successive values are close, there are few revisions : less than 0.2 point for aggregates.

Figure : revisions between April 2022 and March 2024

Type of source: OPISE statistical survey, monthly in industry.

Frame on which the source is based: The (annual) structural business survey of firms (SBS) is used. In France, the EAP survey combines SBS and Prodcom purposes. The customs data are also used in order to improve the selection of firms and products sold on foreign markets.

Sample or census: A two-stage sample is drawn: the first stage selects firms, the second one chooses representative products among the output of firms (with a contact between the field surveyors and the firm).

Criteria for stratification: The largest firms are selected until at least 40% and most often 60% of the commodity-group total turnover is covered (cut-off technique). Units that do not fall within these criteria might be selected to obtain a better coverage of a particular product family, especially when previously selected units seem misclassified. The choice of the products is made by field surveyors during the contact with the selected units. In agreement with the contact person inside the firm, a selection of representative products is made.

Threshold values and percentages: Production units with a turnover less than EUR 3 millions are generally excluded from the survey. Approximately 3,800 firms are surveyed for PPI in industry. About 24,000 representative products are recorded in the database.

Frequency of updating the sample: Approximatively every 5 years, for each covered CPA class (4-digit level).

Monthly, sometimes quarterly (especially when the product is not sold every month, or in case of tariffs with annual updates, or for firms subject to a heavy survey burden such as a pricing model).

Questionnaires used in the survey: The questionnaire is specific to the firm, but is built with a unique form for the whole sample (including import prices and SPPI). The questionnaire is pre-filled with the information previously received from the field surveyors and the prices communicated by firms themselves for previous periods. Available both on paper and on INSEE’s website via a single entry point for business surveys (https://auth.insee.net/auth/realms/questionnaire-entreprises/protocol/openid-connect/auth?response_type=code&client_id=coltrane-portail&redirect_uri=https%3A%2F%2Fentreprises.stat-publique.fr%2Fportail%2F&state=18d74d3a-065a-41e4-82df-57a0b667a19f&login=true&scope=openid)

Planned changes in national questionnaires: None.

Data collection media:

Both postal and electronic data collection are available.

Respondents are given access to the website  entreprises.stat-publique.fr (https://auth.insee.net/auth/realms/questionnaire-entreprises/protocol/openid-connect/auth?response_type=code&client_id=coltrane-portail&redirect_uri=https%3A%2F%2Fentreprises.stat-publique.fr%2Fportail%2F&state=18d74d3a-065a-41e4-82df-57a0b667a19f&login=true&scope=openid)

Planned changes in data collection methodology: None.

Selective editing is applied in line with EDIMBUS manual, and a "Canadian questionnaire" is implemented online in order to collect reasons for price changes bigger than 10% in absolute value. 

Estimates for quality change linked with new products:

Many techniques are used, depending on the context:
— Monthly overlap whenever possible;
— Imputation of the average price change in the series (by default);
— Prices kept constant (for tariffs preferably);
— Imputation of the average price change for the same respondent;
— Selection of another product from the same respondent;
— Selection of a similar product from another respondent;
— Imputation of the price change of the main raw material.
When a product disappears, the firm is contacted in order to supply data for a new one.

Estimates for grossing-up to population levels: None.

Type of index: Chain-linked Laspeyres indices in reference 100 in 2021 (annual average), from CPA 4 digit upwards.

Method of weighting and chaining: The weights are proportional to the production (sold) on the relevant market. This information is obtained from national accounts at aggregated levels and from the structural business statistical survey (SBS) at CPA 4-digits. Below CPA 4-digit level, the aggregation is made according to the information gathered by the field surveyors.

WDA, SA and other calculations

Gross data only. Data are neither working days adjusted nor seasonally adjusted.

Explanations can be accessed on: https://www.insee.fr/en/metadonnees/source/indicateur/p1639/description

The complete and detailed methodology is also available on : Producer Price Indices | Insee 

IMF DQAF on PPI in English can be accessed on http://dsbb.imf.org/pages/sdds/DQAFBase.aspx?ctycode=FRA&catcode=PPI00.