Producer Price Index in Czech Republic

The Czech Republic's Producer Price Index measures the change in factory-gate prices of industrial goods sold on the domestic market, excluding transport, distribution and taxes. Published by the Czech Statistical Office (CZSO), it covers energy, mining and manufacturing, but not construction.

It is compiled from a regular survey of a broad sample of industrial establishments on their selling prices, producing a base-year index (=100) that is periodically rebased. The methodology is harmonised across the EU and is reported as year-on-year and month-on-month changes.

Producer prices are a leading indicator of inflationary pressure: higher production costs tend to feed through to consumer prices with a lag. A hotter reading points to firmer consumer inflation ahead and nudges the Czech National Bank (CNB) towards tighter policy and a firmer koruna.

For the underlying trend it helps to strip out the most volatile component, energy. The figures can be revised in later releases, and the pass-through to consumer prices is neither immediate nor complete.