1. Measurement of construction output
Christian Gysting, Statistics Denmark

2. Contents Background Current sources and methods New sources
Impact of applying new sources

3. Background
Report (2013) from The Danish Productivity Commission; The national accounts figures does not give a true picture of the development of the productivity in the construction industry.
Statistics Denmark – in consultation with major stakeholders – decides to improve the calculations.
Report (2010) produced in collaboration with the Danish Industry and Construction Authority gives description on how calculations can be improved.

4. Output by products, 2013.
Mill. DKK.
Percentage
Dwellings
55.297
27,0%
New construction
15.406
7,5%
Capital repair
28.329
13,8%
Current repair
11.563
5,6%
Non-residential buildings
58.324
28,5%
30.123
14,7%
10.267
5,0%
17.934
8,8%
Other structures
50.991
24,9%
New structures/Capital repair
38.738
18,9%
12.253
6,0%
Supplements (Own-account production)
40.267
19,7%
Total output, Construction industry
100,0%

5. Current sources and methods
Estimation methods for the construction industry at current prices:
Output: Each product is compiled separately
Total output is equal to sum of products
Value added: SBS used as source
Intermediate consumption: Estimated as a residual

6. Current sources - output by products (I)
Construction of new dwellings and private non-residential buildings:
Price multiplied with quantity method: Number of square meters x price per square meter.
Quantities from the Danish register on buildings (BBR)
Prices from a benchmark and taking forward by construction cost index
SBS data on investment in non-residential buildings

7. Current sources - output by products (II)
Current and capital repair
Price multiplied with quantity method: Number of employees x turnover per employee
Quantities from Employment in the construction industry (by kind)
Prices from a benchmark and taking forward by construction cost index
Separation of current and capital repair by using information from cost surveys / HBS

8. Current sources - output by products (III)
Gross fixed capital formation for non-residential buildings and other structures
Sources: SBS and government statistics
Additional information on export, import and VAT used for compiling output
Own account repair and maintain
Source: Household budget survey (HBS)
Item also includes addition for black economy activity

9. Current sources – constant prices
Constant price figures derived by the use of 2 kind of cost indices:
Construction cost index for residential buildings
Construction cost index for civil engineering projects
Cost indices (only) measure changes in wages and intermediate inputs

10. Current sources and method - disadvantages
Cost indices: Does not cover impact of changes in margins or productivity
Quantity variables (Square meters or employment by kind): Does not cover impact of quality or productivity changes

11. New sources
3 new sources will be available for the construction industry:
Turnover by products
Extent of subcontracts within the construction industry
Producer price indices for construction

12. New sources: Turnover by products
Decomposition of turnover by products:
New construction (gross fixed capital formation)
Dwellings
Non-residential buildings
Capital repair (gross fixed capital formation)
Current repair (intermediate consumption)
Other structures
New structures (gross fixed capital formation)
Other

13. New sources: Subcontracting
Output for the construction industry is calculated excluding subcontracting
Turnover by products include subcontracting – a correction is necessary
Question added to the cost survey for the construction industry - will be used to identify the extent of subcontracting
Scope in 2015 according to the cost survey: mill. DKK

14. New sources: Producer price indices for construction
The following price indices for construction will be developed:
One family homes – Hedonic, based on reported characteristics for standard houses
Apartment blocks – Model pricing, compilation outsourced
Repair and maintenance – Model pricing
Highways – Model pricing, compilation outsourced

15. New sources – impact
The first results for 2015 for the construction industry shows lower level of production and a lower real growth rate
But the first results must be interpreted with caution:
The year 2015 is the first year with new survey
The year 2015 is still a provisional year
Further research needed to investigate discrepancies

16. Impact – output by products
2015, Mill. DKK
Current NA
New sources
Difference
Dwellings
64.445
66.401
1.956
New construction
18.929
35.637
16.709
Capital repair
32.847
14.099
Current repair
12.669
16.664
3.995
Non-residential buildings
63.012
49.747
30.724
22.640
-8.083
12.638
16.153
3.516
19.650
10.953
-8.697
Current method

17. Impact – output by products
2015, Mill. DKK
Current NA
New sources
Difference
Other structures
50.089
42.784
-7.305
New structures/Capital repair
37.558
34.217
-3.341
Current repair
12.531
8.566
-3.964
Other
10.641
Current method

18. Impact – output by products
2015, Mill. DKK.,
Current NA
New sources
Difference
Dwellings
64.445
66.401
1.956
Non-residential buildings
63.012
49.747
Other structures
50.089
42.784
-7.305
Other
10.641
Supplements
41.992
Total output
-7.973

19. Impact – real growth rates
Period
Current NA
New sources
Total output for Construction industry, real growth rates
2015
3,8%
2,9%
Current method