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4.1. The Price Index of Materials used in building other than house building, Six Capital Cities and Canberra was first published in January 1969 on a reference base of 1966-67 = 100.0 and using a weighting pattern derived from estimated materials usage in 1966-67. A description of the first series, including its composition and weighting pattern, is given in the January 1969 issue of Catalogue Number 6407.0 and in Labour Report No. 54, 1969.
4.4. This index measures changes in prices of selected materials used in the construction of buildings other than houses in capital city statistical divisions. It is used by both the government and private sectors primarily for adjusting business contracts. It is used also for economic analysis.
4.6. The index relates to all materials, fittings and fixtures which form an integral part of the structures of buildings other than houses and which are customarily installed before the buildings are occupied. Materials used in constructing electrical, water and gas mains to buildings from public mains are included, as are materials used in constructing sewerage and drainage services from the buildings to public sewerage and drainage systems. Materials used in the construction of external works associated with buildings (e.g. paths and surface parking areas) are also included if they are integral parts of the building's construction.
4.7 Although many of the selected materials are also used in house building, in building repair, maintenance and alteration work, as well as in civil engineering work (e.g. roads, drains, bridges), the weighting pattern of the index is not applicable to those other activities of the construction industry.
4.8. Since the weights used are based on an average materials usage for a range of different building types, the index movements are not necessarily representative of price movements of materials used in any particular building or any other type of building.
Composition and weighting
4.9 The index includes 63 items which are combined into 10 industry of origin groupings, 15 special combinations and an 'All Groups' index.
4.14. The materials included in the rebased index and the relative weights assigned to them are based on the estimated average usage of building materials, in buildings other than houses. The estimates were based on material usage in a sample of representative buildings. In deriving these estimates, the ABS employed the services of a consultant firm of quantity surveyors who derived the data from bills of quantities which were priced for materials only. Labour and other costs were not included.
4.15. Some of the items carry not only their own weight but also the weight of similar items not directly priced.
4.16. As noted earlier, the items that comprise the index have been combined into 10 groups on an industry of origin basis. The groups are defined in terms of the Groups (three digit level) of the 1993 edition of the Australian and New Zealand Standard Industrial Classification (ANZSIC).
4.19. Price collection is spread over the three months of the quarter. The prices relate to specified standards of each material and are obtained from representative suppliers of the materials used in buildings (other than houses). These suppliers include manufacturers, wholesalers, building supply merchants, hardware stores and importers.
4.24. There are two broad levels at which weights are used in the compilation of index numbers. At one level are the item weights, which were mentioned earlier, and are provided in Table 4.1, Table 4.2a, Table 4.2b and Table 4.2c. These weights are commonly called regimen item weights and are fixed between the periodic reviews of the whole index. For the current index regimen a sample of buildings in each building type was selected from ABS building completion statistics. Details of the materials used in these buildings were obtained from consultant quantity surveyors.
Materials supplied to individual order
4.27. Some materials which are supplied to individual order, such as structural steel, present special problems in the measurement of price change over time because the same item is not being sold in consecutive price periods. The method used to measure price change for these types of materials is referred to as model pricing. A particular design which has recently been made and which is representative of a supplier's output is specified in detail and becomes the model. Respondents recost the model and provide prices each quarter for the fixed detailed specifications of the model. Although the 'models' priced may not be regularly sold, they do provide a consistent measure of price change where the items actually sold vary over time in terms of design and quality.
4.28. For the purpose of measuring price change the aim is to determine actual prices being paid. It is therefore necessary to seek measures of 'special' discounts, when they occur, in addition to normal 'trade' discounts. The measurement of special discounts poses a problem because of the many and varied forms they take and the manner in which they may be applied. Continual attention is given to this problem and changes in special discounts are incorporated in the index, to the extent that they are determined.