Copyright 2010, The World Bank Group. All Rights Reserved. 1 Construction statistics, part 2 Business statistics and registers

Copyright 2010, The World Bank Group. All Rights Reserved. Large construction enterprises Large construction enterprises may create special problems of data collection owing to the complex forms in which information may be available within the enterprise One solution is intensive register maintenance, including complete structuring of the enterprise in complete sets of statistical and reporting units Another extreme is classifying enterprises as single-establishment or as multi-establishment entities Single establishments receive a single questionnaire covering the whole set of data required Enterprises receive an enterprise questionnaire covering enterprise- level data and a set of questionnaires for its establishments which the enterprise is then asked to report on 2

Copyright 2010, The World Bank Group. All Rights Reserved. Building and dwelling production Statistics on building and dwelling production describe the volume of construction Volume is normally measured in cubic capacity and number of dwellings of building projects The volume index describes changes in the value at constant prices of new buildings Volume units are the number of buildings, cubic volume, gross floor area, total area, number of dwellings and volume of production 3

Copyright 2010, The World Bank Group. All Rights Reserved. Index of construction turnover An index of turnover of construction is comparable to an index of industrial production It describes the monthly development in the turnover of construction companies Indices of turnover of building construction, civil engineering and specialized construction activities may be calculated as sub-indices Apart from the original indices, seasonally adjusted series can be calculated 4

Copyright 2010, The World Bank Group. All Rights Reserved. Renovation building Renovation is an important sub-activity of construction Renovation is different from normal repair in that it encompasses more complex operations Statistics on renovation building describe the renovation activity of building construction Data maybe obtained from large-scale housing owners and companies Renovation projects may be classified into various types of renovation 5

Copyright 2010, The World Bank Group. All Rights Reserved. Construction prices Construction price indices are needed to calculate the volume of production by construction industries These indices are used for deflation of components of national accounts, but also for adjustment of construction contracts and leases, and as a basis for indexation for insurance purposes There is considerable variation in the concepts underlying the compilation of construction price indices by countries 6

Copyright 2010, The World Bank Group. All Rights Reserved. Difficulties Construction price indices may be described as indices compiled from: Prices paid by the contractor for inputs to the construction process The price received for the completed output of construction activity paid by the client The selling price including all of the demand side cost elements paid by the purchaser or final owner Difficulties include: – The product “building” or “construction” is not only produced by the construction industry – Sub-contractors selling their output to the construction industry – The many different activities of the construction branch 7

Copyright 2010, The World Bank Group. All Rights Reserved. Supply side Most information used in the compilation of construction price indices comes form the supply side However the completed building or construction is not always produced d by one construction contractor alone Often the client concludes contracts with a number of firms, also firms outside the construction industry Work categories correspond to the “goods” or “products” observed in other price statistics For the construction contractor, the prices in question may be either the prices of the various inputs, or the prices received by the construction contractor for the output 8

Copyright 2010, The World Bank Group. All Rights Reserved. Output prices From the supply side, output prices are a function of the following factors: – Direct inputs: materials, labor, energy, etc. – Indirect inputs and overheads: depreciation, administrative expenses, etc. – Productivity: how efficiently inputs are converted into outputs – Profit: a residual determined by the sales price, and combinations of the three preceding items 9

Copyright 2010, The World Bank Group. All Rights Reserved. Demand side Construction price indices may also be compiled from the demand side This could entail collecting information on the price actually paid by the purchaser It could also involve gathering information on a number of additional cost elements Such elements may include the price of the land, permissions, taxes, insurance etc. 10

Copyright 2010, The World Bank Group. All Rights Reserved. Seller’s prices Seller’s price indices measure changes in the prices of construction output paid by the purchaser or final owner Seller’s price indices cover the total sales price of completed construction, including not only the cost of labor and materials, but also land, direct and indirect selling expenses, and seller’s profits These include both supply factors such as wage rates, material costs, and productivity, and demand factors such as demographic changes, incomes, and the availability of mortgage finance These indices are the closest approximations in item coverage to the actual price paid for construction output Seller’s construction prices are close to the consumer price concept 11

Copyright 2010, The World Bank Group. All Rights Reserved. Standard construction indicators There are no internationally recommended indicators for construction However, many countries collect data on the following aspects of construction: – Building activity – Index of construction production – Building approvals – Building commencements – Construction prices of various types – Construction of infrastructure – Employment in construction – Completed dwellings – Changes in dwelling stock – Housing finance – Housing sales 12