1. Construction output in Scotland Stephen Curtis, Office for National Statistics

2. Structure of the talk The register and the sample What information do we get? What do we produce for the UK? How do we use our information to produce data for Scotland? How reliable are the figures?

3. Coverage Our surveys cover: Great Britain Construction, as in the Standard Industrial Classification, except SIC 41.1 (development of building projects)

4. The register To December 2009 was the Builders Address File (BAF) From January 2010, has been the Interdepartmental Business Register (IDBR) Employment 2009 (BAF)2010 (IDBR) 0-3136,007172,808 4-114 57,209 49,828 115 and over 809 774 Total194,025223,410* Numbers of businesses *of which, Scotland 15,732 (=7.0%)

5. Sample sizes Sample of 7,800 construction businesses: Target for each set of results is for at least 70% of forms to be back; 80% by value of register turnover. Achieved. Register employment Population count (Q4 2011) Proportions of turnover Sample sizeSampling fraction 0-4184,005 21.1%3,311 1.8% 5-19 32,965 17.5%2,134 6.5% 20-99 5,613 17.7%1,506 26.8% 100 and more 831 43.7% 831100.0% 223,414100.0%7,782 3.5%* *= 50.2% by turnover

6. What information do we get? Up to December 2009, BIS obtained figures of output (quarterly) and new orders (monthly). For new work output there was only one question. For repair and maintenance there were 4 categories From January 2010, ONS has obtained figures of output (monthly) and new orders (quarterly). New work output is now split into 6 categories; repair and maintenance into 5 (infrastructure added)

7. What the output survey measures Output, not turnover (excludes sub-contractors) Output of the construction industry, not construction output. Will exclude: De minimis output Businesses not classified to construction Most direct labour departments Development of building projects

8. The output questionnaire

9. The new orders questionnaire

10. UK data From these questionnaires we can (and do) measure directly: The value of output. The value of new orders obtained, in total, by region, and by type of activity. Both sets of figures are then deflated and seasonally adjusted. (Output is only seasonally adjusted quarterly).

11. Regional data For new work, we have no direct information on regional output For new orders of £100,000 or more: we do have information about location of the work For new orders under £100,000: we assume they are located in the region of the firm’s address We can make assumptions about how long these orders take to fulfil Those assumptions are based on surveys from 2005-2007

12. Location of construction work New orders, Q4 2011, £ million

13. Fulfilling new orders NN+1N+2N+3N+4N+5N+6N+7N+8N+9 N+10 Public housing 0.070.140.180.200.170.130.080.04 Private housing 0.070.130.170.190.170.130.090.06 Infrastructure0.070.110.13 0.120.100.080.060.040.02 Public non- housing 0.080.160.20 0.170.120.070.03 Private industrial 0.160.280.270.170.090.05 Private commercial 0.120.200.210.190.140.090.05 “N” is the quarter that the new order arrives; N+4 would be four quarters (one year) later, and so on Proportions of all the work on the order

14. New orders, Scotland Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Public housing 13103 64155113 91130171 Private housing 319253146317186226 132 Infrastructure12818559240434110132202305 96 89 Public non- housing 130210243204283326445285 Private industrial 32 50140 75 31 43 Private commercial 139165239302182257250 £ million

15. Contributions to output, Q4 2011, Scotland Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Public housing 0.914.4 11.531.019.211.810.4 6.8 Private housing 22.332.924.860.231.629.420.3 7.9 Infrastructure 9.020.4 7.731.256.413.2 16.218.3 3.8 1.8 Public non- housing 10.433.648.640.848.139.131.2 8.6 Private industrial 5.114.037.812.8 2.8 2.2 Private commercial 16.733.050.257.425.523.112.5 £ million

16. Output, Q4 2011, Scotland Q4 2011 Public housing106 Private housing229 Infrastructure191 Public non-housing260 Private industrial 75 Private commercial218 £ million Total = £ 1,080 million Note: because the new orders source largely uses the location of the building work, this mainly represents some form of output in Scotland, not necessarily output by Scottish businesses.

17. Other regions We then undertake the same calculation for each of the other regions of Great Britain We compare the aggregate for all regions taken together with total output directly from the construction survey The total output figures first published for Q4 2011 were:

18. Published output, Q4 2011 - new work only Q4 2011 Public housing1,153 Private housing4,089 Infrastructure4,029 Public non-housing3,176 Private industrial 872 Private commercial6,438 £ million Total new work = £ 19,757 million

19. Repair and maintenance Value of new work, Q4 2011 = £19,757m Repair and maintenance= £11,185m Total, Q4 2011= £30,942m So, new work = 64% of the total; repair and maintenance = 36%

20. Repair and maintenance by region Repair and maintenance data are collected in the output survey Assumed that repair and maintenance occurs in the region where the firm is based So, for example, all repair and maintenance in Scotland is assumed to be undertaken by firms with Scottish addresses No system of lagging new orders is needed

21. Deflation We often want to know not only the current value of building work, but whether the output of the construction industry is growing or shrinking in “real terms” To do that, we divide the current price amounts by an indicator of how prices have moved in the period (a “deflator”) We only deflate data for GB as a whole

22. Construction industry deflators Are obtained from the Building Cost Information Service (BCIS) Are of two types: output deflators and tender price deflators Are used for Great Britain and for every region (by type of work)

23. Output and tender price deflators Type of deflator Public housingTender price Private housingOutput price InfrastructureTender price Public non-housingTender price Private industrialTender price Private commercialTender price Repair and maintenanceOutput price

24. Output price deflators Figures for Q4 2011 (2005=100) Public housing111.9 Private housing119.0 Infrastructure119.4 Public non-housing109.0 Private industrial108.1 Private commercial100.9 Repair and maintenance125.3* * Derived from: public housing R&M = 124.0; private housing R&M =143.7; other categories of R&M = 114.7

25. Seasonal adjustment We use the standard ONS method for seasonal adjustment, X-12 ARIMA Seasonal adjustment is applied individually to each type of work (public housing, private housing etc) Seasonal adjustment of total GB output is the sum of the component series Regional figures are not seasonally adjusted

26. Reliability of new orders as a leading indicator GB data

27. The structure of Scottish construction

28. GB figures vs Scotland: new work

29. GB figures vs Scotland: R&M

30. GB figures vs Scotland: all work

31. Any questions?