Producer Price Inflation, UK - March 2024, Including Services, January To March 2024

17th April 2024

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). Also including quarterly estimates monitoring the changes in prices charged for services provided to UK-based customers for a range of industries.

Producer input prices fell by 2.5% in the year to March 2024, down from a revised fall of 2.2% in the year to February 2024.

Producer output (factory gate) prices rose by 0.6% in the year to March 2024, up from a rise of 0.4% in the year to February 2024.

On a monthly basis, producer input prices fell by 0.1% but output prices rose by 0.2% in March 2024.

Input and output price levels have been relatively stable since mid-2022 but remain substantially higher than their early 2021 levels.

Services producer prices rose by 3.6% in the year to Quarter 1 (Jan to Mar) 2024, up from a revised increase of 3.5% in the year to Quarter 4 (Oct to Dec) 2023.

This month's Services Producer Price Index (SPPI) estimates are being published with updated weights in line with the annual chain-linking methodology.

Producer price inflation rates
The annual inflation rate of the input Producer Price Index (PPI) fell to negative 2.5% in the year to March 2024, down from a revised negative 2.2% in the year to February 2024 (Figure 1). This was the 10th consecutive month the annual rate has been negative. The monthly input PPI fell by 0.1% in March 2024, after a revised rise of 0.3% in February 2024 (Table 1).

The annual inflation rate of the output (factory gate) PPI was 0.6% in the year to March 2024, up from 0.4% in the year to February 2024. This is the highest the rate has been since May 2023 (Figure 1). The monthly inflation rate was 0.2% in March 2024, down from 0.3% in February 2024 (Table 1).

Estimates for both February and March 2024 are provisional, and figures for the latest 12 months are subject to revisions as additional survey data are returned and validated. Effective response rates at time of first publishing can be found in Section 10: Strengths and limitations.

We are reviewing our range of outputs and publications for PPI statistics to better suit user needs. We would welcome feedback from users on their use of PPI statistics via our user engagement survey.

Input producer price inflation
Producer input prices fell by 2.5% in the year to March 2024, down from a revised fall of 2.2% in the year to February 2024. Of the 10 product groups for input Producer Price Index (PPI), 5 made downward contributions to the annual inflation rate in March 2024. The largest of these came from inputs of chemicals, and inputs of other parts and equipment, which contributed negative 1.12 and 0.74 percentage points, respectively (Figure 3).

Chemical prices fell by 6.9% in the year to March 2024 (Table 2), with falls in the prices of "other organic basic chemicals", which survey respondents noted were the result of market dynamics (supply and demand) and falling gas prices.

Despite providing the second-largest downward contribution to the annual rate, prices for other parts and equipment increased by 0.1% in the year to March 2024 (Table 3). The downward contribution was caused by weight changes, which were introduced to the PPI last month. We provide more information in our Chain-linking in business prices article.

In comparison, the offsetting upward contributions were small (totalling 0.35 percentage points), with inputs of fuel and other inputs providing the largest of these, at 0.24 and 0.09 percentage points, respectively.

The prices of materials and fuels imported by UK manufacturing fell by 3.2% in the year to March 2024, which is up from a revised fall of 3.7% in February 2024. The monthly prices fell by 0.1% between February and March 2024, compared with a revised increase of 0.7% between January and February 2024. The fall in annual import prices is consistent with the stronger value of sterling, which rose by 5.8% in the year to March 2024.

Output producer price inflation
Producer output (factory gate) prices rose by 0.6% in the year to March 2024, up from 0.4% in the year to February 2024. Of the 10 product groups for the output Producer Price Index (PPI), 7 made upward contributions to the annual inflation rate in March 2024. The largest of these came from refined petroleum products and other outputs, which contributed 1.99 and 1.04 percentage points, respectively (Figure 5).

Petroleum prices rose by 6.0% in the year to March 2024 (Table 4), the highest the rate has been since February 2023. This contribution was partly influenced by weight changes, with this product group increasing in weight from 6.1% in 2023 to 7.5% in 2024 (see Table 6 in our February 2024 statistical bulletin).

In comparison, offsetting downward contributions came from chemicals and paper products, at negative 1.82 and 1.19 percentage points, respectively. Chemical prices fell by 9.2% in the year to March 2024 (Table 4), with the main price falls coming from fertilisers.

Read the full ONS report HERE