Analyse of producer cost index for construction in Ukraine 25th May of 2015

Warning If the document presents mostly the conceptual problems of the elaboration of producer price index that are more producer cost index slightly blurred by the addition of the estimated profit, it does not not call into question the work to build the list of representative objects and by aggregation higher level indices. The document points out the problems the problems ensure that producer cost index can be published and producer price index can be developed and published. Analyse of producer cost index for construction in Ukraine 25th May of 2015

Objectives The producer cost indices for construction are primarily used for national accounts, macroeconomic analysis and international comparisons. SSSU produces statistical observation over change of prices on construction-assembly works and calculation of prices indices. Analyse of producer cost index for construction in Ukraine 25th May of 2015

Remarks If SSSU want to calculate a price index SSSU need to collect prices. In the case of construction of roads, bridges, tunnels, it is not obvious to build such a data collection monthly or quarterly. But you can ask firms to fill at each period a fictitious quotation when they have not real price of transaction. In order to produce a price index SSSU estimates a profit with a model. BUT the point is that you can not anticipate a return point, a change of speed, and so on, and this made the estimation of the profit very dangerous. If SSSU want to calculate a cost index SSSU need to collect the prices of the inputs of the producer: equipment, labour, energy, materials, transport, services, pollution control. Analyse of producer cost index for construction in Ukraine 25th May of 2015

Prices on construction-assembly works A survey to collect the prices of the items (materials, energy equipment?) used for construction and of the labour cost. This survey allows you to calculate cost index. It would be interesting to split the data collection in the different items of KLEMST and to use the Structural business survey in order to compare the actual structure to the SBS structure. Analyse of producer cost index for construction in Ukraine 25th May of 2015

Why a specific data collection for construction index? A survey to collect the prices of the items (materials, energy equipment or machinery?) used for construction and of the labour cost From the survey, a geometric mean of each item is produced in prevention of heterogeneous series. Are this index based on purchase prices index different from the producer price index ? Usually the purchase price index are smoother than the producer price index. The margin of the wholesaler absorbs a part of the change in price of the producer price index. Analyse of producer cost index for construction in Ukraine 25th May of 2015

Why a specific data collection for construction index? The annual sampling of firms may blur the analyse of change in price. It can be difficult to separate the effect of change of firm from the change in price. Some firms change their prices in January other all along the year. This data collection can be included in the data collection of producer price index. Analyse of producer cost index for construction in Ukraine 25th May of 2015

Requirements of SSSU Selection of physical resources is based on analysis of local resource estimates of representatives object taking account of physical resources should characterise price behaviour on the construction market and be constantly used in construction assembly works Value of physical resources should account at least 70% of the total value of physical resources used in construction-assembly works Selected physical resources should match with the most widely spread construction technologies Analyse of producer cost index for construction in Ukraine 25th May of 2015

Legal index of the SSSU: Distribution of Representative Objects by Building and Structure Types Analyse of producer cost index for construction in Ukraine 25th May of 2015

List of cost on construction-assembly works SSSU publishes costs on construction-assembly works Who manage the list of type of construction ? Who verify the adequacy of the list with the reality of the construction? In France, we decide to build a lit of index and to change the weights every 5 years. But, if someone (professional federation, ministry, a firm, etc.) asks INSEE to create or to modify an index, we study the question. With the help of the Directorate of Legal Affairs of the Ministry, INSEE will appreciate the opportunity of the creation or modification. In conclusion, we can modify or create an index during the laps of 5 years. Analyse of producer cost index for construction in Ukraine 25th May of 2015

Labour cost The approach of cost of labour is in line with the European definition. Does SSSU publish a labour cost index for construction? Or more detailed? Analyse of producer cost index for construction in Ukraine 25th May of 2015

Aggregation and chain-linking The general price index for construction-assembly works across Ukraine is calculated using the Laspeyres formula and linking to December of the previous year like CPI in France. Analyse of producer cost index for construction in Ukraine 25th May of 2015

Analyse of producer cost index for construction in Ukraine Thank you for your attention! Insee 18 bd Adolphe-Pinard 75675 Paris Cedex 14 www.insee.fr Informations statistiques : www.insee.fr / Contacter l’Insee 09 72 72 4000 (coût d’un appel local) du lundi au vendredi de 9h00 à 17h00 Contact M. Gérard Vittek Tél. : 01 41 17 51 15 email : gerard.vittek@insee.fr