Revision of the Input-Output Price Index of Manufacturing Industry by Sector (IOPI) to 1995 base

July 21, 2000
Bank of Japan
Research and Statistics Department

The Input-Output Price Index of Manufacturing Industry by Sector (IOPI) focuses on the prices of products in manufacturing industry. The IOPI is aggregated by using prices of goods for production as the input price index and prices of produced goods as the output price index, respectively.

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1. Purpose of the revision

(1) The base year for both index and weight calculation has been updated from 1990 to 1995 to incorporate the recent changes in Japan's economic structure.

(2) Comprehensive revision in the index-developing process has been undertaken in order to reduce the cost of compiling the IOPI, including the burden on reporters.

(3) For users demanding consistent historical time-series indexes, a new 1990 base index using the same methods as the 1995 base index has been produced. The methods for compiling the indexes have been disclosed further to enhance transparency.

2. Major points of the revision

2.1. Change of the price collection rule

(1) The IOPI has been compiled by using the commodity indexes in the Wholesale Price Index (WPI).

(2) The additional collection of approximately 1,800 price data which had been undertaken exclusively for the IOPI was abolished.

The exceptions are some price data which can be taken into the WPI to improve its accuracy. They will continue to be collected and will be taken into the WPI at the time of the revision to 2000 base scheduled for 2002. ¹

At that time, we will change its name to the Corporate Goods Price Index (CGPI).

(3) The weights within the grouping of "commodity group," which is the smallest unit of the IOPI, have been calculated by using the weights of commodity indexes in the WPI.

The weights for aggregated groupings above the layer of the "commodity group" have been calculated based on the I-O Tables, the method of which is the same as the indexes up to the 1990 base. For the input price index, the values of the intermediate sector for manufacturing industry at purchasers' prices in the I-O Tables have been used as its weights. For the output price index, the values of domestic products for the manufacturing industry sector at producers' prices in the I-O Tables have been used.

2.2. Simplification in composition of indexes

(1) Up to the 1990 base index, both the gross-weighted base index, which includes internal trade in the same sector, and the net-weighted base index, which excludes internal trade, had been compiled. However, the net-weighted base index has been abolished from the 1995 base, because the need for such data was low compared to the substantial workload required for its compilation.

(2) The index for sector in the gross-weighted base has also been abolished for the same reason as the net-weighted base index.

The 1995 base IOPI consists of "manufacturing industry sector" and " aggregated sector," which correspond to "manufacturing" in "13 sectors" and "aggregated major group" in the I-O Tables respectively. Each sector is classified into "aggregated major commodity group," "major commodity group" and "commodity group," successively, which correspond to "aggregated major group," "major group" and "basic sector" in the I-O Tables respectively.

2.3. Consideration for the continuity of the indexes

Because of the revision described in section 2.1, the continuity between the 1995 base index and the 1990 base index has been lost. The new 1990 base index has been produced using the same methods as the 1995 base index to meet the need for consistent historical time-series indexes. For the "manufacturing industry sector" and " major sector," the linked index, which is the new 1990 base index converted into 1995 base, has also been provided from January 1990 to December 1994.

The new 1990 base index is compiled from January 1990 to December 1995.

2.4. Further disclosure of methods of compilation

Details of the methods for compiling the IOPI have been disclosed. The correspondence of price data between the IOPI and the WPI, the weights, and the process of compiling indexes have also been disclosed more than before on the BOJ Web site.

2.5. Other changes

(1) A special adjustment to maintain correspondence between the elements of inputs and outputs has been discontinued because the workload required was too great compared to the benefits in improving the accuracy of index.²

2Up to the 1990 base index, when some outputs or inputs had been excluded from the index for some reason, the inputs used for the outputs or the outputs produced from the inputs were also excluded to maintain consistency between input and output price indexes.

(2) Creation of original groupings for the IOPI through modification of the I-O Tables (such as dividing or combining groups, or changing the name of groups) in some categories has been abolished. The groupings of the I-O Tables have been directly adopted to the IOPI to facilitate ease of use for those who make their own indexes.

(3) The release date of the monthly index has been changed from "the 3rd working day counting from the 11th of the next month" to "the 7th working day of the next month (a day after the release of the WPI)," in principle. As a result of this change, the monthly index will be published a few days earlier than before.

Also, the revision of the index to the new base year has been completed half a year earlier than in the past.

Purpose of the revision
Major points of the revision
Detailed contents of the revision
The historical trends of the new and the old indexes (Appendix 1-8)

1995 base indexes (from January 1995 to June 2000)
1995 base linked indexes (from January 1990 to December 1994)