Aug 1, 2021 13:27
2 yrs ago
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Native in: Italian 
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Factory inflation
English
Bus/Financial
Finance (general)
After a brief online search, it seems to me that "factory inflation", "factory gate inflation", "ex-factory inflation", and "producer price inflation" are all synonyms -- can someone more knowledgeable than me confirm this?
The paragraph I'm reviewing regards China:
"Factory inflation is still high, with the latest reading for June at 8.8%, however this hasn't fed through to consumer price inflation which stands at 1.1%"
Thank you!
The paragraph I'm reviewing regards China:
"Factory inflation is still high, with the latest reading for June at 8.8%, however this hasn't fed through to consumer price inflation which stands at 1.1%"
Thank you!
Responses
+2
2 hrs
Althea Draper
United Kingdom
United Kingdom
Native in English
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English
United Kingdom
Freelance Medical Translator, MA (Hons)
Native in: English (Variants: British, Scottish) 
Works in: French to English, Spanish to English, English
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8
Selected
Change in the price of goods sold by manufacturers
According to the UK office of national statistics (ONS),
"Producer price inflation - Changes in the prices of goods bought and sold by UK manufacturers including price indices of materials and fuels purchased (input prices) and factory gate prices (output prices).
Output prices - The factory gate price (output price) is the amount received by UK producers for the goods that they sell to the domestic market. It includes the margin that businesses make on goods, in addition to costs such as labour, raw materials and energy, as well as interest on loans, site or building maintenance, or rent.
Input prices - The input price measures the price of materials and fuels bought by UK manufacturers for processing. It includes materials and fuels that are both imported or sourced within the domestic market. It is not limited to materials used in the final product but includes what is required by businesses in their normal day-to-day running, such as fuels."
https://www.ons.gov.uk/economy/inflationandpriceindices/bull...
So factory gate inflation is one of two measures of producer price inflation (PPI), however, in many instances, PPI is used interchangeably with factory gate prices and factory inflation as in these pieces -
https://www.straitstimes.com/business/economy/china-factory-...
https://www.reuters.com/article/us-china-economy-inflation-i...
According to the China Statistical Yearbook
"Producer Price Indices for Industrial Products reflect the trend and degree of changes in general ex-factory prices of all manufactured goods for first sale during a given period."
http://www.stats.gov.cn/tjsj/ndsj/2019/indexeh.htm
So it would look like ex-factory inflation in China is what is also called "factory inflation, "factory gate inflation, and "producer price inflation.
According to the UK ONS
"Consumer price inflation
Consumer price inflation is the rate at which the prices of goods and services bought by households rise or fall. It is estimated by using price indices."
The consumer price includes delivery costs, profits of middlemen/shops, etc and so isn't the same as the aforementioned indices and inflations.
"Producer price inflation - Changes in the prices of goods bought and sold by UK manufacturers including price indices of materials and fuels purchased (input prices) and factory gate prices (output prices).
Output prices - The factory gate price (output price) is the amount received by UK producers for the goods that they sell to the domestic market. It includes the margin that businesses make on goods, in addition to costs such as labour, raw materials and energy, as well as interest on loans, site or building maintenance, or rent.
Input prices - The input price measures the price of materials and fuels bought by UK manufacturers for processing. It includes materials and fuels that are both imported or sourced within the domestic market. It is not limited to materials used in the final product but includes what is required by businesses in their normal day-to-day running, such as fuels."
https://www.ons.gov.uk/economy/inflationandpriceindices/bull...
So factory gate inflation is one of two measures of producer price inflation (PPI), however, in many instances, PPI is used interchangeably with factory gate prices and factory inflation as in these pieces -
https://www.straitstimes.com/business/economy/china-factory-...
https://www.reuters.com/article/us-china-economy-inflation-i...
According to the China Statistical Yearbook
"Producer Price Indices for Industrial Products reflect the trend and degree of changes in general ex-factory prices of all manufactured goods for first sale during a given period."
http://www.stats.gov.cn/tjsj/ndsj/2019/indexeh.htm
So it would look like ex-factory inflation in China is what is also called "factory inflation, "factory gate inflation, and "producer price inflation.
According to the UK ONS
"Consumer price inflation
Consumer price inflation is the rate at which the prices of goods and services bought by households rise or fall. It is estimated by using price indices."
The consumer price includes delivery costs, profits of middlemen/shops, etc and so isn't the same as the aforementioned indices and inflations.
Note from asker:
| Many thanks for your detailed and well researched answer! :-) |
Peer comment(s):
| agree |
philgoddard
: So producer price inflation isn't quite a synonym of the other three.
49 mins
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Thanks Phil. According to Investopedia, there are 3 basic measures of PPI but it's the core index of the finished goods that's normally referred to as PPI https://www.investopedia.com/articles/economics/11/breaking-...
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| agree |
David Hollywood
: https://stats.oecd.org/glossary/detail.asp?ID=5623
10 hrs
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Thanks David
|
4 KudoZ points awarded for this answer.
18 hrs
Lisa Rosengard
United Kingdom
United Kingdom
Native in English
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English
Works in field
United Kingdom
experienced and well qualified linguist
Native in: English (Variant: UK)
Works in: Spanish to English, English, Spanish, and 3 more.
producer price increases
A reference from the Office for National Statistics states: "Producer price inflation: In UK statistical bulletins, changes in the prices of goods bought and sold by UK manufacturers, including price indices for materials and fuels purchased (input prices) and factory gate prices (output prices), also include quarterly estimates which monitor the changes in prices charged for services provided to UK-based customers for a range of industries."
A BBC news article on economic changes and inflation explains:
"Cost pressures on UK firms have gone up to record level, suggesting a current surge in consumer prices. A survey produced by IHS Markit/CIPS showed input costs increased by the fastest market rate for 13 years.
Factories struggled to source raw materials as inflation increased highly.
Consumer price inflation reached a two year high of 2.1% this year until May. If firms are paying more for companies and ti increase wholesale prices, then retail prices could increase even more.
The composite Purchasing Manager Index (PMI) expects the economy to grow quickly as pandemic restrictions ease off."
A BBC news article on economic changes and inflation explains:
"Cost pressures on UK firms have gone up to record level, suggesting a current surge in consumer prices. A survey produced by IHS Markit/CIPS showed input costs increased by the fastest market rate for 13 years.
Factories struggled to source raw materials as inflation increased highly.
Consumer price inflation reached a two year high of 2.1% this year until May. If firms are paying more for companies and ti increase wholesale prices, then retail prices could increase even more.
The composite Purchasing Manager Index (PMI) expects the economy to grow quickly as pandemic restrictions ease off."
Reference:
Reference comments
13 hrs
David Hollywood
Native in English
&
English
Works in field
worked for int. orgs (IMF, OAS, IDB)
Native in: English
Works in: Spanish to English, German to English
Related KudoZ points
:
43
Reference:
Definition:
A basic price with the “factory gate” as the pricing point, that is, the price of the product available at the factory, excluding any separately billed transport or delivery charge.
A basic price with the “factory gate” as the pricing point, that is, the price of the product available at the factory, excluding any separately billed transport or delivery charge.
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