Producer Price Index (PPI) measures a change in the prices of goods and services, over a span of time, either as they leave their place of production or as they enter the production process. PPI measures a change in the prices received by domestic producers for their outputs or the change in the prices paid by domestic producers for their intermediate inputs.
The Producers Price Index has two types of indexes. First, the output indexes which measure changes in the prices received by producers. Second, the input indexes which measure changes in the cost of production (excluding labour and capital costs).