Directorate for Business Statistics (DCSE)

“Prezzi alla Produzione” (Producer Price Index)
This index measures the average producer price development of industrial products sold on domestic and non-domestic market, at the initial stage of commercialization. The purpose of this index is to provide information on price dynamics over the business cycle.
It is also used in National Accounts as a deflator and for updating contracts in the private sector. 

NACE Rev. 2.
For dissemination it is also used the MIGs breakdown (Main Industrial Groupings)

Activities covered: NACE Rev. 2 Sections B to E36 are covered by the output prices data. Indexes are not required for the following Groups or Classes of NACE Rev. 2: 07.21, 24.46, 25.4, 30.1, 30.3, 30.4 and 38.3.
Size classes covered: all enterprises

List and definition of variables: the list of products is made up of about one-thousand items (PRODCOM). 
Prices, about ten thousand price series, are collected by a list of 5570 enterprises. 
Planned changes in information collected: none
Accounting conventions: data are collected for products manufactured and sold on the domestic and non-domestic market. Reporting units are the industrial enterprises. By definition, prices are effective transaction prices surveyed on the day the orders are made (collected prices are registered at the moment of contract). Prices are ex-factory or warehouse, excluding taxes (VAT), customs duties or subsidies. Other sale conditions are defined by the most common contracts.  

Reporting unit: Industrial enterprise.
Observation unit(s): Manufactured industrial enterprise's producer price

Legal basis:

National level: this is one of the compulsory surveys fixed every year by a Decree of the President of the Republic (D.P.R.).

European level:

Regulation (EU) 2019/2152 of the European Parliament and of the Council of 27 November 2019 on European business statistics, repealing 10 legal acts in the field of business statistics;

Council Regulation No 1165/1998 Council Regulation No 1165/1998 of 19 May 1998 Introducing short-term statistics at European level;

Regulation (EC) of the European Parliament and of the Council 1158/2005 (Council Regulation No1158/2005) amending Regulation 1165/98 introducing the European sample schemes, industrial import prices, output prices for services and other changes.

Commission Regulation 1503/2006 (Commission Regulation 1503/2006) defining variables and frequency of data compilation, repealing new orders received for building construction and new orders received for civil engineering

Commission Regulation 656/2007 (Commission Regulation 656/2007 )   on the definition of main industrial groupings (MIGS) in NACE Rev. 2.

Commission Regulation 657/2007 (Commission Regulation 657/2007) implementing rules for the use of European sample schemes in STS

Commission Regulation 472/2008 (Commission Regulation 472/2008 ) introducing the new base year 2005 and the statistical classification of economic activities, NACE Rev. 2, into short-term statistics.

Commission Regulation 1178/2008 (Commission Regulation 1178/2008 ) introducing further adaptations for European sample schemes in relation to the new economic classification.

Commission Regulation 461/2012 ( Commission Regulation 461/2012) repealing industrial new orders Obligation on units to provide data: surveys are mandatory. Penalties are foreseen for non-response.

Several national legal acts guarantee the confidentiality of data requested for statistical purposes. According to art. 9, paragraph 1 of the Legislative Decree n. 322 of 1989, personal data can only be disseminated in aggregate form, in order to make it impossible to identify individuals. The Personal Data Protection Code – introduced by the Legislative Decree no. 196 of 30 June 2003 – and Legislative Decree no. 101 of 10 September 2018 (General Data Protection Regulation) provide special rules concerning the processing of personal data for statistical purposes within the National Statistical System (Sistan). Further, in order to make statistical confidentiality and protection of personal data effective, Istat is currently taking appropriate organisational, logistical, methodological and statistical measures in accordance with internationally established standards.
Links to relevant legal acts on statistics are also listed on the website of Sistan (https://www.sistan.it/).

Survey elementary data are treated as confidential. Aggregated data are disseminated in I.Stat 
Some variables can be transmitted to Eurostat as confidential when they are not disseminated in Italy

Data are released simultaneously to all interested parties by issuing the press release "Prezzi alla produzione dell’industria e delle costruzioni" or "Prezzi alla produzione dell’industria, delle costruzioni e dei servizi" Eurostat receive embargoed data in advance of its publishing date. No pre-release access. The press release (Italian version and short English version) is subsequently posted on the Istat’s website (https://www.istat.it/en/prices). 
Data are also sent to Eurostat according to required standards by EDAMIS using SDMX format. Eurostat receive embargoed data in advance of its publishing date. Data are transmitted once per month: provisional data for the month t-1 and final data for the month t-2.
The short-term information is also used for quarterly and annual National Accounts.

A monthly press release "Prezzi alla produzione dell’industria delle e costruzioni”, or "Prezzi alla produzione dell’industria, delle costruzioni e dei servizi" including a breakdown for domestic market, non-domestic market and total. A quarterly release"Prezzi alla produzione dell’industria, delle costruzioni e dei servizi including a breakdown for domestic market, non-domestic market and total Prices/Archive

Data are disseminated in I.Stat database (I.Stat), theme Prices, sub-theme Production prices, dataset Producer price index for industrial products - monthly data. 
The on-line database I.Stat is open and free, statistics are organised by theme in a two-level hierarchical tree. Data are presented in aggregate form in multidimensional tables; acting on variables, reference periods and the arrangement of heads and sides users can create custom tables and graphs. Datasets can be searched by keyword, theme and region.
A wide range of standard metadata facilitates the retrieval and understanding of statistics by users. More information available in the User Guide User Guide

Before data dissemination, validated microdata are stored in the repository of the Institute, ARMIDA.
The repository ARMIDA (Archive of validated microdata) was established with the main objective of preserving and documenting the data produced by Istat surveys, and has subsequently supported the objective of disseminating data. The data archived in ARMIDA supplies, in fact, the different channels for the dissemination of microdata (for internal use at the Institute through the "Memorandum of access to microdata of ARMIDA "internal users", for authorities in Sistan, for research files, for standard files, etc.).

This index is also one of the 'Principal European Economic Indicators (PEEIs)'https://ec.europa.eu/eurostat/web/euro-indicators

A short description of the methodology and characteristics of the survey is contained in the technical explanatory note attached to the press release updated regularly.
A more detailed description of methodology and sources used in preparing statistics is contained in the Information System for Survey Documentation and Quality Control (Siqual); it is available on Istat's.
website SIQUAL. This system manages qualitative information related to each single phase of a survey's production process (Process description)

More information about procedures applied for quality management and quality assessment in the document "Quality Guidelines For Statistical Processes" - December 2012

Essential points of Istat quality policy are: process quality, product quality, documentation, respect for respondents, strengthening of statistical literacy, users' orientation.
For more details: Quality Guidelines For Statistical Processes" - December 2012

Main users of producer price index are:

• Institutions: government departments, ECB, national central bank, international organisations, etc.
• Social actors: employers' organizations, trade unions, lobby groups, etc. 
• Media 
• Researchers & students 
• Enterprises/businesses 
• Internal users
• Eurostat

The response rate of first estimate is about 96% for Domestic market and 94% for Non Domestic market
The response rate of definitive estimate is about 97% for Domestic market and 95% for Non Domestic market
Reminders are sent to non-respondents and follow-up operation are carried out.

The cost estimate is compiled in terms of total number of hours worked (THW). It is equal to the product of three terms: (total) Annual Working Days (AWD), (total) Hours Worked per Day (HWD), Number of Persons involved in the Survey (NPS).

The burden estimate is compiled in terms of total number of minutes (TNM) taken to fill in the (web) questionnaire. The burden is applied to respondent, i.e. the person who fills in the questionnaire on behalf of the enterprise. To estimate it, two elements have been taken into account. The former distinguishes between beginner and expert respondent, to point out respectively the person who fills in the web questionnaire for the first time and the one who is familiar with filling in the form. The latter, closely concerns the information that have to be monthly provided. On average, by combining these two elements, the time spent to fill in the questionnaire (just the burden) is estimated in terms of total number of minutes between a minimum and a maximum threshold.

Monthly, provisional and final data are disseminated as indices. Data concerning the current month are provisional while data referring to the previous months are final. 
Major changes in methodology are announced in ad hoc publications. Annually, the base period is updated Time series indices are available in the online database. Nota_Informativa_PPI_31marzo2020 
Advance notification of methodological changes is also provided through seminars and papers disseminated throughout the scientific community. The same revision policy is applied nationally and in transmissions to Eurostat

At present time, Producer price indices are not revised and seasonal adjusted. Data are firstly released as “provisional” (30 days after the end of the reference period) and subsequently as “final” (45 days after the end of the reference period). The distance between provisional and final data allows to increase the response rate, allowing revisions too (if any).The Mean Absolute Revision (MAR), Mean Revision (MR) and RMAR (Relative Mean Absolute Revision) are compiled for totals (and MIGs breakdown). These indicators refer to 36 monthly data from 2018 to 2020; indices are released in the reference base 2015=100. The indicators refer to the Domestic market.

Data validation is carried out on:

• Prices, by a guided and checked data-entry procedures that allows to eliminate the incompleteness errors that could occur during the recording phases and to identify the outlier prices (filtering method);
• Trend of indices by comparison between the percentage change on previous month, the percentage change on corresponding month of previous year and a similar product index;

PPI are a system of Laspeyres chain-linked type indices Indices compilation is carried out through three main steps:

1. firstly, by calculating price relatives, i.e. ratios between the surveyed price at time (y,m) and that of the base period (the month of December of the preceding tear) pointed out as (y,0) or (y-1,12);
2. price relatives are aggregated by simple geometric mean in order to derive the elementary product index;
3. Laspeyres indices are compiled by grouping product indices at Class level (4-digit of the NACE Rev. 2) up to the overall index.