1. A new approach to Construction PPPs ICP Global Office 1st ICP Workshop for the 2011 round in Western Asia Region July 21-22, 2010 - Beirut, Lebanon

2. Overall objectives Data model and approach Information sources A worked example Preliminary results Conclusions and next steps 2 Outlines

3. 3 Overall objectives To provide a better operational mechanism for construction PPP computation To ensure consistency with National Accounts through the use of Supply and Use Tables

4. Construction PPPs compared 4 PPPs as calculated 2010 ICP construction PPPs, 2005 OECD construction PPPs, 2008 USA1.00 Australia1.571.391.49 New Zealand1.671.801.75 Singapore1.530.62na South Africa4.874.08na UK0.690.64

5. 5 Calculating weighted input price levels 1 SELECT PRODUCT GROUPS AND ITEMS SIC GROUPS AND PREVIOUS STUDIES 2 COLLECT ITEM PRICES 3 CALCULATE ITEM PRICES RELATIVE TO BASE COUNTRY PRICES PRICE SURVEY 4 DERIVE COUNTRY SPECIFIC WEIGHTS INPUT OUTPUT / SUPPLY AND USE TABLES VALIDATE INPUT PRICES 5 CALCULATE WEIGHTED ITEM PRICES RELATIVE TO BASE COUNTRY WEIGHTS 6 PRODUCE COUNTRY TOTAL INPUT PRICES

6. 6 Calculating Construction PPPs VALIDATE PRICE LEVELS 10 PRODUCE AGGREGATE COUNTRY PPPs NATIONAL ACCOUNTS AND INPUT OUTPUT TABLES 6 PRODUCE COUNTRY TOTAL INPUT PRICES 7 APPLY GROSSING-UP FACTOR(S) 8 PRODUCE OUTPUT PPPs RELATIVE TO BASE COUNTRY 9 REPEAT STEPS 3 and 5 TO 8 FOR COUNTRIES IN TURN

7. 7 List of construction inputs Item prices Item weights Grossing up factors Information sources

8. Selected industry groups and materials 8 SIC codeIndustry groupSelected materials and products 14Other mining and quarryingAggregates for concrete (2 items) 20Wood and wood products Softwood for carpentry, exterior plywood, interior plywood, chipboard sheet, softwood window, softwood internal door 23Petroleum productsTo follow (will include petrol and diesel) 24ChemicalsTo follow (will include paint) 25Rubber and plastic productsVinyl floor tiles, plastic pipe, PVC insulated cable 26 Glass, ceramic, clay and cement products Ordinary Portland cement, ready mix concrete (2 items), precast concrete slabs, common bricks, facing bricks, hollow concrete blocks, solid concrete blocks, clay roof tiles, concrete roof tiles, float/ sheet glass, double glazing units, ceramic wall tiles, plasterboard, white WC, white WHB, clay drain pipe 27/28Metal products High yield steel reinforcement, mild steel reinforcement, structural steel sections, cast iron drain pipe, copper pipe 29-31MachineryTo follow (will include mechanical and electrical items) 71Renting equipmentTo follow

9. 9 Value weights for construction inputs SIC codeIndustry groupValue weightings USAUNZSingSA 14Other mining and quarrying4120510 20Wood and wood products1517308612 23Petroleum products1177163 24Chemicals to follow 25Rubber and plastic products98104314 26 Glass, ceramic, clay and cement products 202922483532 27/28Metal products233014302319 29-31Machinery1871682710 71Renting equipment to follow All selected groups100 Selected industry groups as a proportion of intermediate consumption 46.5%59.5%76.9%39.5%81.4%77.8%

10. 10 Value weights for 17 countries in 2005

11. 11 Value weights in UK, 1992 - 2007

12. 12 Availability of input output tables Region Number of countries in region Number of I/O tables identified Coverage in each region Africa521529% Asia Pacific311961% CIS9778% Latin America and Caribbean 341338% OECD/ Eurostat 443784% Western Asia121*8% Total1829251%

13. 13 Grossing up factors per type of work Type of workAustralia New Zealand Singapore South Africa UKUSA 1Residential buildings1.291.261.81 2Non-residential buildings1.19 3Buildings (1 + 2)1.233.431.24 4 Other construction (civil engineering) 1.562.891.46 5 Non- residential construction (2 + 4) 1.331.312.09 6 Construction trade services 1.651.71 7Repair and maintenance2.45 8All construction1.431.443.301.321.632.00

14. 14 Preliminary results: Construction PPPs Base USA US $ Australia AU $ New Zealand NZ $ Singapore S $ South Africa Rand UK £ USA1.0002.1461.9901.8087.0400.882 Australia0.8961.0001.4561.2594.0650.506 New Zealand 0.6031.1171.0000.9443.4840.439 Singapore0.7151.0531.0551.0003.3990.467 South Africa 0.3630.5560.5990.5161.0000.306 UK1.7452.5612.9012.7729.6131.000

15. 15 Conclusions and next steps The approach works and produces credible PPPs The item list will be useful for any price comparison approach --------------------------------------------------------- Developing survey instruments Pilot survey/ country visits – October 2010+ Addressing outstanding issues, Developing procedures for basic headings Collecting information on input mixes and industry structures

16. Thank you…