Industrial import price index overview

From Statistics Explained

Data from May 2014. Most recent data: Further Eurostat information, main tables and database.

The industrial import price index (abbreviated as IMPR or sometimes MPI) is a business cycle indicator which measures monthly changes of prices of products which are imported by domestic enterprises from other countries.

According to the short-term business statistics regulation only countries in the euro area (EA-18) are obliged to transmit import prices to Eurostat. However several non euro-area countries in the European Union (EU) and even some EFTA countries provide this information as well.

The indices for import prices are calculated with a distinction between imports coming from within or outside the euro area.

Figure 1: EA-18 industrial import prices for total industry, euro and non-euro-area, gross data, 2005-2014 (2010=100), Source: Eurostat (sts_inpi_m)

Main statistical findings

Figure 2: EA-18 Industrial import prices for total industry and main industrial groupings (gross) 2005-2014 (2010=100), Source: Eurostat (sts_inpi_m)
Table 1: Industrial import price index, annual rates of change, 2005-2013, Source: Eurostat (sts_inpigr_a)
Table 2: EA-18 Industrial import price index, annual rates of change, total industry, main industrial groupings and economic activities, 2005-2013, Source: Eurostat (sts_inpigr_a)

Between January 2005 and July 2008 (pre-crisis peak) import prices for total industry increased at an average rate of 0.4 % per month (around 1 % per year). In the following nine months until April 2009 import prices dropped at a pace of around 1.5 % every month to the level of around four years earlier. In the following two years until April 2011 the price level has increased again. From this point until August 2012 the import prices were more or less stable. Since then a distinct downwards trend can be identified (Figure 1).

For the different main industrial groupings price developments were relatively heterogeneous. Intermediate goods and non-durable consumer goods show a similar pattern as total industry (of which they make up more than 50 %), i.e. an increase between 2005 and the second half of 2008, a prolonged fall until around mid-2009, followed by an increase which resulted in index levels some points higher than before the crisis.

Prices for capital goods and durable-consumer goods had shown a slightly declining development since 2005/2006. Import prices for energy products (which constitute almost 15 % of the total euro area index) rose steeply between January 2007 and July 2008. Then they fell even more quickly for about half a year and then increased again at a rapid pace. Simultaneously to the total industry a downwards trend can be observed from August 2012 (Figure 2).

In all countries for which data since 2005 are available total import prices show basically the same up-and-down-pattern. Positive rates of around 4 % or more in 2006 followed by lower but still positive rates in 2007 and again relatively high rates in 2008. For 2009 all countries recorded negative rates of change (corresponding with the steep fall of the index in the second half of 2008 and early 2009) and again relatively high positive rates in 2010 and 2011. In 2012 the growth rates were clearly lower again. For 2013 import prices in all countries of the Euro Area register a negative growth rate (Table 1).

Data sources and availability

The obligation to transmit import price data to Eurostat was introduced in 2005 by Regulation 1158/2005of 6 July 2005. The need for this indicator arose in particular in the context of the European Monetary Union. Industrial import price indices became available in 2007. Most series start with the year 2006.

The import price indices cover most mining activities and a large number of manufactured products at the 2-digit level of the NACE Rev. 2. The index is calculated on the basis of the Statistical classification of products by activity (CPA). Some product groups are however excluded (such as nuclear products, weapons, ships and aircrafts, printing and some repair services, see Table 2).

Import prices in short-term statistics are defined as follows, they:

  • include cost, insurance and freight at the national border of the importing country, but not duties or import taxes;
  • are actual transaction prices (not list prices) including e.g. discounts;
  • are measured in the currency of the importing country. Transactions in other currencies have to be converted (this implies that the import price index is affected by exchange rate fluctuations);
  • must take into account all price determining qualities of the imported products (e.g. servicer and guarantee conditions, included transport costs etc.);
  • are recorded when ownership is transferred and the index should reflect the average prices during the reference period (month).

Currently the indices for industrial import prices are calculated with 2010 as the base year (=100).

Context

The industrial import prices index shows the development of prices of goods imported by enterprises which are used as intermediate products in their production process, as capital goods or as goods to be resold to consumers. The development of the index is used to forecast the development of other prices notably for domestic goods. The index is an important tool for the European Central Bank and the national central banks for monitoring and analysing inflationary developments. Industrial import prices are part of the so-called 'Principal European Economic Indicators (PEEI)' which are used to monitor and steer economic and monetary policies in the EU and in the euro area.

The industrial import price index is not the only statistical indicator which provides information on the price developments of imported goods. Unit value indices (UVIs) are calculated directly from international trade data. In principle, they are simply the total value of imports of a product, divided by the total amount imported (for most products this is measured in weight). UVIs have a long history, and long-time series are available. One of the key features of UVIs is the level of detail. Elementary UVIs can be calculated for around 10 000 products, based on the most detailed level of the combined nomenclatura used for classifying international trade. UVIs record price changes which are not purely a result of an evolution of prices but which are also due to quality changes and change in the mix of products. Industrial import prices, while not as detailed as UVIs, are adjusted for quality changes and allow a more precise identification of inflationary pressures stemming from import prices.

See also

Further Eurostat information

Publications

Main tables

Industry (t_sts_ind)
Industry import prices index (t_sts_ind_impi)

Database

Industry (sts_ind)
Industry import prices index (sts_ind_impi)

Dedicated section

Methodology / Metadata

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