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Measurement of construction output
Christian Gysting, Statistics Denmark
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Contents Background Current sources and methods New sources
Impact of applying new sources
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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.
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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%
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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Impact – real growth rates
Period Current NA New sources Total output for Construction industry, real growth rates 2015 3,8% 2,9% Current method
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