Economics · Ch 7 — Index Numbers
Index of Industrial Production
7.4.4
Index of Industrial Production
Unlike the CPI and WPI, the Index of Industrial Production (IIP) measures quantities, not prices. Its base year is 2011-12 = 100 (with effect from April 2017); the base is refreshed often because each year some items cease to be made while new ones appear.
Where price indices are weighted averages of price relatives, the IIP is a weighted arithmetic mean of quantity relatives, the weights being each good's value added by manufacture in the base year (Laspeyre's approach):
where is the quantity relative of good for the current year (base year 0) and its weight, over goods. The IIP is available by industrial sector:
| Sector | Weight |
|---|---|
| Mining | 14.4 |
| Manufacturing | 77.6 |
| Electricity | 8.0 |
| General Index | 100.0 |
and by use-based group:
| Group | Weight |
|---|---|
| Primary | 34.1 |
| Capital Goods | 8.2 |
| Intermediate Goods | 17.2 |
| Infrastructure/Construction Goods | 12.3 |
| Consumer Durables | 12.8 |
| Consumer Non-durables | 15.3 |
| General Index | 100.0 |