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Output of the Construction Industries (Price Index of)
 
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NAME OF ORGANISATION
Australian Bureau of Statistics (ABS)


OVERVIEW
The Output of the Construction industries indexes measure changes over time in the prices of new construction outputs for the eight Australian capital cities.

These indexes currently include the following the Australian and New Zealand Standard Industrial Classification (ANZSIC) classifications:

        3011 – House Construction
        3019 – Other Residential Building Construction
        3020 – Non-Residential Building Construction
        3101 – Road and Bridge Construction

PURPOSE
The Output of the Construction industries price indexes are used as deflators in the calculation of chain volume estimates of capital expenditure in the Australian National Accounts. The indexes are also important inputs into Stage of Production Producer Price Indexes.

The construction industries are one of the main driving areas in the Australian economy, having a significant contribution to GDP and a multiplier effect on the activity in other industries. The price movement’s indicators developed by the Output of the Construction Industries indexes is a valuable tool in economic analysis.


Construction output indexes can also be used for contract adjustment and asset revaluation.

SCOPE
The Output of the Construction industries indexes are output indexes, so the valuation basis is at basic prices and the price excludes Goods and Services Tax (GST) and any subsidies. The price of a building is defined as excluding the price of land, site works (such as demolition, land clearance and roads), external services (such as drainage, water and electricity connection) and design.


Even within the focused coverage of the index, the output of the construction industries is of such a variable nature that conventional pricing methodology cannot be used. Instead, movement in the price of buildings is being measured using a component cost method. In this method, buildings are regarded as a set of standardised homogenous components. The price movement of a whole structure is effectively derived by measuring the price movements of its components.

Each quarter, component prices for each region are provided by a consulting quantity surveyor. Prices are for work in place, paid by a prime contractor to a subcontractor.

The component prices are as close as possible to market prices; that is, they reflect not only labour, material and plant input costs, but also subcontractors' margin. The preliminary and overhead expenses are covered in the building price, however due to the difficulty in obtaining an objective measure of a prime contractor's margin which is representative of all the activity which is within the scope of the index; the prime contractor's margin varies quarter to quarter.


DATA DETAIL

Conceptual Framework
The Output of the Construction industries indexes are fixed weight indexes. The items included in the indexes are chosen on the basis of work done and provided by a consulting quantity surveyor. The weights for each Output of the Construction Industries indexes (
3011 – House Construction, 3019 – Other Residential Building Construction, 3020 – Non-Residential Building Construction and 3101 – Road and Bridge Construction) at the Australian level are derived from the Australian National Accounts: Input-Output Tables, 2007-08 (cat. no. 5209.0.55.001).

The weights for the eight capital state split for ‘3011 – House Construction, 3019 – Other Residential Building Construction and 3020 – Non-Residential Building Construction’ is derived from the Building Activity, Australia (cat. no. 8752.0) statistics for the calendar years of 2010 and 2011. These weights are effective from September quarter 2012.

The Output of the Construction industries index ‘3101 – Road and Bridge Construction’ weights are derived from the Engineering Construction Activity, Australia (cat. no. 8762.0) statistics for the calendar years of 2010 and 2011.

Main outputs
The price indexes of the Output of the Construction Industries (3011 – House Construction, 3019 – Other Residential Building Construction, 3020 – Non-Residential Building Construction and 3101 – Road and Bridge Construction) are published in Table 17 (Output of the Construction Industries) of Producer Price Indexes, Australia (ABS cat. no. 6427.0) as index numbers at the Australia and eight state capital levels.


These indexes also contribute to the Stage of Production indexes which are published in Tables 1-10 (Stage of Production) of Producer Price Indexes, Australia (ABS cat. no. 6427.0).

Classifications
Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition.


Other concepts (summary)
All concepts have been noted in Conceptual Framework.


GEOGRAPHIC DETAIL
Australia
New South Wales
Victoria
Queensland
South Australia
Western Australia
Tasmania
Northern Territory
Australian Capital Territory


Comments and/or Other Regions
Not applicable


COLLECTION FREQUENCY
Quarterly


Frequency comments
The majority of the prices are collected on a quarterly basis, but there are some prices collected on an annual basis due to availability.


COLLECTION HISTORY
The Output of the Construction Industries indexes were first produced in an experimental form in the March quarter 2000 and were published under ANZSIC 1993 classification:

        4111 – House Construction
        4112 – Residential Building Construction n.e.c.
        4113 – Non-Residential Building Construction
        4121 – Road and Bridge Construction
        4122 – Non-Building Construction (Discontinued)
The indexes were re-classified under ANZSIC 2006 in the September quarter 2009 as:
        3011 – House Construction
        3019 – Other Residential Building Construction
        3020 – Non-Residential Building Construction
        3101 – Road and Bridge Construction
DATA AVAILABILITY
Yes


Data availability comments
The price indexes of the Output of the Construction industries indexes are available for dissemination at the Australian and eight state capital level:
        3011 – House Construction
        3019 – Other Residential Building Construction
        3020 – Non-Residential Building Construction
        3101 – Road and Bridge Construction
Data is currently available in catalogue number 6427.0, Producer Price Indexes, Australia and on the ABS web site <www.abs.gov.au>.

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