How do you calculate a bearings price escalation clause using the PPI?
Divide the current value of BLS series WPU114905 (Ball and Roller Bearings) by its value at contract signing, then apply that ratio to the bearings part of the price. Over the 12 months to September 2026 the ratio was 1.050. A usable clause also names an averaging window, a rule for revised values and missing months, and a cap.
Latest · WPU114905
399.977
Sep 2026Revisable
Year on year
+5.0%
from 380.974
5 years
+32.5%
from Sep 2021
Record
High
highest since 2016
The mechanism
A bearings escalation clause indexes the bearings-affected portion to a published series instead of fixing it at signing. The benchmark is the BLS producer price index for Ball and Roller Bearings, series WPU114905.
Bearings is a real input cost in maintenance and repair, rotating equipment rebuilds, and machine building work. Its price can move further over a contract term than a fixed-price contingency is built to absorb, so indexing it moves that risk onto the published series instead of onto one party.
What's specific to bearings
Bearings are made from bearing-grade steel that is then ground and finished to tight tolerances. Steel is only part of the cost. A maintenance contract tied to a raw steel series is likely to track the wrong thing.
Ball and Roller Bearings against the hot rolled steel price index, both set to 100 in the first month they share
Sep 2026WPU114905 157Hot rolled steel price index 186
Sources: WPU114905 (Ball and Roller Bearings); BLS WPU101704.
Since 2016, this index has not followed the hot rolled steel price index closely. Over most 12-month spans the two moved by different amounts, and often in different directions.
Over the 12 months to Sep 2026, the hot rolled steel price index rose 15.0% and this index rose 5.0%.
0.18%
Median monthly move since 2016, up or down.
+0.5% to +11.9%
Range of 12-month changes since 2016.
1%
Share of months that moved more than 3%.
The index has stayed far from raw steel prices. A clause that escalates bearings with a steel series would adjust on moves the bearing price did not make.
The calculation, step by step
Base index value. The index value at the base period, usually the month of contract signing or bid submission.
Current index value. The index value at the adjustment date, usually the month of delivery or invoicing.
Ratio. Current value divided by base value.
Adjustment. Apply the ratio to the bearings-affected portion only.
Take a contract signed in September 2025 with $90,000 of bearings scope, invoiced in September 2026.
Base index, Sep 2025
380.974
Current index, Sep 2026 (revisable)
399.977
Ratio, 399.977 ÷ 380.974
1.0499
Amount at signing
$90,000
Adjustment added to that amount
+$4,489
Live figures from the stored series, updated when the provider publishes. Sep 2026 can still be revised, so a clause should say whether the invoice uses the first published value or is trued up later.
Where clauses go wrong
BLS publishes other series a bearings clause could be read against, and they do not move together. A clause that only says "the bearings index" leaves the two sides to pick different ones.
Over the 12 months to Sep 2026, these series moved differently. On the same $90,000, the gap between the highest and lowest is $9,454.
Hot Rolled Steel Bars, Plates, and Structural Shapes
+15.0%
+$13,516
Write the series code, WPU114905, into the contract text, with the BLS title next to it.
No rule for revised valuesBLS can revise each value for 4 months after it is first published. Right now that covers Jun 2026 to Sep 2026. Say whether the first published value is final for invoicing, or whether invoices are trued up once BLS revises it.
Divide the current value of BLS series WPU114302 (Fluid Power Valves) by its value at contract signing, then apply that ratio to the fluid power valves part of the price. A usable clause also names an averaging window, a rule for revised values and missing months, and a cap.
The base period is the index value every future adjustment gets compared against. Pick a period that reflects normal conditions, not a seasonal high or low, and tie it to a real contract event, like signing or bid submission, not an arbitrary date.
The averaging window is how many months of index data get blended before a clause applies them. A single month reacts fast but carries noise. A 12-month average is smooth but slow to catch a real trend. The same index, read through a different window, produces a different adjustment on the same day.