Gérard Vittek Head of section “index of the cost of construction and rent” 20 th to 22 th May of 2015 The former output price index of construction index in France Prices of construction index

20 th to 22 th May of 2015 The former output price index of construction index in France French NUTS1

20 th to 22 th May of 2015 The former output price index of construction index in France Sampling in the building permits database The sample of building permits is selected in the building permits database. New construction Construction of a house or a flat In a moving window before the beginning of the quarter.

20 th to 22 th May of 2015 The former output price index of construction index in France French output price index from the questionnaire to the database The database of French ministry of Ecology contains: Information from building permits database Information from survey database step 1 Information from survey database step 2 The first step is use to select in the building permits those which correspond to a new construction of a house or of a flat. For instance in a building, you can have some shops at he first level not the flat of the manager of the shop at the last level. In the second step,surveyors collected the prices and the quantities of items used in order to build the construction.

20 th to 22 th May of 2015 The former output price index of construction index in France French output price index from the questionnaire to the database The database of French ministry of Ecology contains: Information from building permits database : Date of the building permit Address of the construction Type of construction

20 th to 22 th May of 2015 The former output price index of construction index in France Example of the questionnaire for more than one flat

20 th to 22 th May of 2015 The former output price index of construction index in France The questionnaire and the documents asked with it –The plans of the construction –The contracts with the firms in which prices and quantities were compulsory. Quantity surveyor needed them to evaluate the price of the construction. –The market price –Date of the market price The market prices were updated to the first month of the quarter in taking in account the change of the cost index in construction BT01 between the date of fixing of the price and the first month of the quarter. Attention: It can be dangerous when the trend of the prices change during the period.

20 th to 22 th May of 2015 The former output price index of construction index in France The work of architects (quantity surveyors) The ministry of construction updated every 10 years a catalogue of the items used in the construction of houses (~6000 items) and an other in the construction of flats (~8000 items). The catalogue contained the prices of the items fitting included. With the help of the established by the ministry of construction in 1986, architects or quantity surveyors valuated the price 1986 of the construction with the quantities of bricks, of doors, … and the prices After, this price was updated from 1986 to the middle of the previous year and corrected of the change of price of the type of construction, of the geographic area, and so on.

20 th to 22 th May of 2015 The former output price index of construction index in France The Paasche index The comparison of the market price and the estimated price of the construction give and change in price for a construction since the middle of the previous year. The weighted change in price of the sample give the the evolution since the middle of the previous year and the value of the current index. Remark: if a type of construction is absent in a strata, it is not important in, a Paasche index which compare the basket of product of the quarter with the basket of the previous period (middle of the past year) in which basket the weights are those of the current basket.

20 th to 22 th May of 2015 The former output price index of construction index in France Balance sheet of this method Advantage : 1.No quality effect to estimate for an additional room or a missing room when you compare a flat with a reference flat. 2.The comparison is between the market price and the valuated price. Disadvantages : 1.The cost of the catalogue is expensive (estimated to euros in 2008) for a life recommended of 5 to 10 years (we used it more than 20 years…) 2.It is very difficult to take in account a changes in law or in techniques during the life of the catalogue 3.The cost of the work of the architects is about euros a year in The time of the work of the architects is a month.

20 th to 22 th May of 2015 The former output price index of construction index in France Conclusion We ought to build a new system of calculation of the producer price index of construction: Less expensive: we would not have 600,000 to build a catalogue and 400,000 euros for the work of the architects. Quicker to produce each quarter: it is not more possible to publish the result of the first quarter the first week of July. Reliable from a technical point of view: it has a legal use Reliable for the public and the users: It goes without saying that we must produce reliable index and to convince the public that it faithful.

Thank you for your attention! Contact M. Gérard Vittek Tél. : Insee 18 bd Adolphe-Pinard Paris Cedex 14 Informations statistiques : / Contacter l’Insee (coût d’un appel local) du lundi au vendredi de 9h00 à 17h00 Output price index for construction