Global Core List survey materials for regional PPP updates Construction and Civil Engineering 2nd Regional Coordinating Agencies meeting May 27-29, 2015 Washington, DC

Recap: ICP 2011 construction approach 38 Material items 33 “Pure” material items; 5 “equipment-type” items Allocated to basic headings based on relevance 5 + 5 Equipment hire items 5 original items; splitted to w and w/o operator For global PPP calculation ref. PPP from M&E Input Cost Approach 7 labor items 1 un-skilled labor; 6 skilled labors No adjustment for productivity Other input data Resource mixes: used to weight sub-heading Mark-ups and professional fees: not used

…Challenges with the 2011 approach Price data quality and reporting Generally very high CVs and several missing data points Item definitions In order to ensure regional “representativity” several item definition were possibly too loose, especially for equipment Unit of measurement (tons, m2, m3, hours, days, etc.) Prices were allowed to be reported to “alternative” unit of measurement, which lead to issues with comparability Resource mixes, mark-ups and professional fees Several missing data points and issues with data quality

Suggestions for improvements: Materials (1) 1. Introduction of Structured Product Definitions (SPDs) All sub-headings To ensure clear, structured and comprehensive item definitions A review by construction expert(s) would still be recommended… 2. Fixing unit of measurement NCAs need to ensure reporting in requested unit of measurement

Suggestions for improvements: Materials (2) 3. Providing more technical details to “equipment-type” items In order to ensure comparability Brand and model are presented as examples Alternative would be to follow “fixed” or “unspecified” brands as in M&E 4 items “linked” to M&E 1 item defined but not linked Air-conditioning equipment 1 item suggested to be deleted Electric fan 1 item could be modified to fit M&E Metal storage tank; from single skinned 15m3 to double skinned 50m3?

Suggestions for improvements: Equipment hire 1. Providing more technical details on the equipment to-be-hired Including example brand and model 2. Fixing ex/inclusion of operator Duplicated items for with and without operator 3. Defining exclusion of fuel Alternative would be inclusion? 4. Adding “specify” parameter To record exact hiring details

Suggestions for improvements: Labor 1. Proving item specifications as per ISCO classification General definition and example tasks 2. “Fixed” details Unit of measurement Hour; day; month? Skill level and training Salary type Information to be specified Items to added? Painter; would however increase the ratio of unskilled vs. skilled to 1:7

Points for discussion (1) General Suggested “refinement” approach agreeable? SPDs; fixing of units; more detailed definitions Materials Any suggestions for removing or addition of items? Suggested “links” to M&E items agreeable? Change the metal storage tank item? Any volunteers for re-refining the item definitions? Equipment hire “Price capture approach” still feasible? Exclusion of operating fuel agreeable?

Points for discussion (2) Labor Suggested links to ISCO classification agreeable? Fix the unit of measurement to hour, day or month? Add “painter” item? Resource mixes Keep the data requirement? Update or keep global default values? Professional fees Keep the data requirement? Further research potential usage of professional fees in PPP estimation? Eurostat-OECD program Extrapolate 2011 ICP prices; OR Carry-out a survey for global PPP update(s)?