Industry-specific cost indices to monitor pressures on inflation

Regina Briseño, Angel Espinoza E, Vicente López and María José Orraca

No 2026-10, Working Papers from Banco de México

Abstract: This paper develops a methodology to construct industry-specific cost indices using input-output tables and information on the evolution of input costs. Applying this method to Mexico, monthly cost indices are estimated for each industry at the highest level of disaggregation for the period January 2005 to July 2024 and made publicly available. To illustrate their usefulness, each item in the Consumer Price Index basket is linked to the industry that produces it. Through descriptive exercises, cost indices are argued to provide a useful framework for tracking the evolution and sources of cost pressures across time and for understanding the inflation surge following the COVID-19 pandemic. Finally, evidence is presented indicating that these indices contain predictive information about future inflation despite incomplete and lagged cost pass-through, suggesting they are a valuable tool for monitoring inflationary risks.

Keywords: Costs; Inflation; COVID-19 pandemic (search for similar items in EconPapers)
JEL-codes: D24 E31 (search for similar items in EconPapers)
Date: 2026-11
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