Index of producer prices for forestry products (state forests)
TextWhat does the indicator describe?
The index of producer prices for forestry products (state forests) measures the development of the prices for raw wood products (stemwood, stemwood sections, industrial timber) that are sold by the forest administrations of the Länder (excl. the city states of Hamburg, Bremen and Berlin). Since the Land forest administrations are the price leaders in the raw wood market, the index can be regarded as representative of the development of raw wood prices in Germany.
How is the indicator calculated?
The index of producer prices for forestry products is compiled every month by evaluating the revenue reports of the Land forest administrations. To this end, the revenues achieved in the reference month (excluding turnover tax) for selected grades of wood, which are shown with a very detailed breakdown by quality and strength, are divided by the quantities sold in the reference month to calculate the average price for each grade. Over time, the average prices for each grade form an individual price series, which is represented as a series of index numbers based on the price level in the base year (= 100). At present, the index is composed of 687 individual price series.
The index of producer prices for forestry products is calculated according to the Laspeyres formula, which is generally used in German price statistics. A characteristic feature of this type of index is that it reflects the price development over time, with the quantities remaining unchanged. To this end, a weighting pattern is specified which is derived from the turnover shares of the selected grades of wood in the base year. The weights of the current base year remain unchanged until a new base year is chosen for the index. The weighting pattern is based on the revenues achieved for the various grades of raw wood as indicated in the revenue reports of the Land forest administrations. The statistics are compiled centrally by the Federal Statistical Office.
How accurate is the indicator?
The general objective of price statistics is to measure pure price changes. This is ensured by keeping constant any factors that are of relevance to the price level (e.g. quality characteristics of the products, terms of delivery and payment). If one of the aforementioned variables changes, the difference between the new and the previously reported price may include a non-genuine price change, which can be eliminated with the help of various quality-adjustment procedures.
However, this approach cannot be applied to the index of producer prices for forestry products as the prices are only available as average prices for the individual products of a given grade. The average price is affected by the fact that the individual products may happen to be relatively cheap or expensive, depending for instance on the prevailing terms of delivery. As a consequence, the index of producer prices for forestry products shows greater volatility compared with price indices to which quality adjustment procedures can be applied,. Adopting a new base year may result in minor revision-related differences if the calculation basis is modified (selected grades, weighting pattern).
When is the indicator published?
Since data processing for the index of producer prices for forestry products can only start when the revenue reports of the Land forest administrations have been received, results do not become available until about 10 weeks after the reference month. They are published together with the price index for agriculture (only in German), but with a time lag of one reference month.
The index of producer prices for forestry products is not only calculated and published for the complete series, i. e. for the total of raw wood products, but also for various types of wood at different aggregation levels. The categorisation principles used for this are based on the categories specified in the revenue reports of the Land forest administrations. These, in turn, are based on the Ordinance on Legally Applicable Grades of Raw Wood, which however is no longer in force.
