| Actual | Previous | Revised | |
| Output - M/M | 0.1% | 0.1% | |
| Output - Y/Y | 3.4% | 3.6% | |
| Input - M/M | 0.3% | -0.3% | 0.0% |
| Input - Y/Y | 1.1% | 0.5% | 0.8% |
Highlights
Producer price data for November 2025 revealed that input prices rose by 1.1 percent on an annual basis, accelerating from a 0.8 percent revised rise in October, signalling a renewed uptick in the cost of raw materials and intermediate goods faced by manufacturers. This suggests that upstream cost pressures have not fully dissipated and may be gaining modest momentum as the year closes.
In contrast, output prices at the factory gate continued to ease, rising by 3.4 percent year-over-year, down from 3.6 percent in October. This divergence points to constrained pricing power among producers, who appear to be absorbing part of the higher input costs rather than passing them fully on to customers. Monthly movements reinforce this view as input prices rose by 0.3 percent in November, output prices increased by just 0.1 percent, indicating cautious price-setting behaviour.
Import prices also rose by 1.3 percent over the year, adding an external layer of cost pressure linked to global supply chains and exchange rate dynamics. Taken together, the figures suggest that while upstream inflation is firming slightly, competitive conditions and softer demand are limiting the transmission of these pressures to final producer prices, reducing immediate inflation risks for consumers.
Definition
The Producer Price Index (PPI) measures the prices of goods bought and sold by manufacturers. The input price index measure the prices of materials and fuels purchased by manufacturers for processing. These are not limited to just those materials used in the final product, but also include what is required by the company in its normal day-to-day running. The output price index captures prices charged by manufacturers as they pass through the factory gate and excludes any VAT or similar deductible tax. Both measures may be seen as leading indicators of consumer price index (CPI) inflation although the short-term correlation is only very weak.
Description
The PPI measures prices at the producer level before they are passed along to consumers. Since the producer price index measures prices of consumer goods and capital equipment, a portion of the inflation at the producer level gets passed through to the consumer price index (CPI). By tracking price pressures in the pipeline, investors can anticipate inflationary consequences in coming months. A producer's price is the amount received by a producer from the purchaser of a unit of goods or services produced as output less any value added tax (VAT) or similar deductible tax, invoiced to the purchaser. It excludes any transportation charges invoiced separately by the producer.
The PPI provides a key measure of inflation alongside the consumer price indexes and GDP deflators. The output price indexes measure change in manufacturer' goods prices produced and often are referred to as factory gate prices. Input prices are not limited to just those materials used in the final product, but also include what is required by the company in its normal day-to-day operations.
The PPI is considered a precursor of both consumer price inflation and profits. If the prices paid to manufacturers increase, businesses are faced with either charging higher prices or taking a cut in profits. The ability to pass along price increases depends on the strength and competitiveness of the marketplace.
The bond market rallies when the PPI decreases or posts only small increases, but bond prices fall when the PPI posts larger-than-expected gains. The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.