Construction price indices reflect the development of the prices of new and the maintenance of existing structures. Price indices are calculated for the following types of construction:
traditional new building construction (residential buildings, office buildings and industrial buildings)
new construction of one-family buildings of a prefabricated type (prefabricated houses)
new construction in civil engineering (streets, bridges, sewers), and
maintenance of blocks of flats.
How is the indicator calculated?
Generally, i.e. with the exception of prefabricated houses, construction has a largely individualised character. As a result, the prices of structures are hardly comparable in a direct manner. To obtain informative results despite that situation, the prices of construction operations required to build structures are monitored over time for calculating construction price indices. It is easier to compare construction operations than the construction of whole structures. Thus, for instance, masonry work includes such categories as "foam mortar work", "non-load bearing dividing wall" and "masonry consisting of small-sized or large-sized bricks".
At quarterly intervals, i.e. in February, May, August and November, prices are collected for selected construction operations. The relevant survey covers about 5,000 representatively selected construction companies. They provide the statistical offices of the Länder with information about the contractually agreed prices of the reference month for currently (base year 2000) 204 selected construction operations. Those prices are market prices upon award of contract, i.e. no bid prices, and turnover tax is not included. Based on the price data for construction operations transmitted by the construction companies, the statistical offices of the Länder calculate the average price development for the individual operations at the Länder level (Länder index numbers). These index numbers are subsequently transmitted to the Federal Statistical Office, which computes the index numbers for the country as a whole. For each construction operation, the Länder index numbers are weighted with the relevant turnover on construction work of the Länder. The federal index numbers form the basis for calculating the price indices for the individual types of structures by deriving from those numbers a weighted average based on the relevant weighting systems for the individual construction operations.
The weighting systems are constructed by taking from the invoice material the construction operations listed for selected construction projects for a specific type of structure and allocating those operations to the relevant survey items and, subsequently, relating the cost of each survey item to the total cost of the construction project.
The indices are calculated in compliance with the Laspeyres method, which is generally applied in the area of German price statistics. A characteristic feature of that type of index is that it only reflects the price development over time, while ruling out effects of quantitative changes as a consequence of changed structures in construction activity. The weighting systems applied to calculate price indices are adapted to the changed structures at about five-year intervals.
Like other price indices in Official Statistics, the construction price indices are intended to measure only genuine price changes. This is achieved by keeping all factors constant that are of relevance to the price level (particularly the quantity unit of a construction operation and its qualitative characteristics). If one of the parameters changes, the difference between the new and the previously reported price may contain a non-genuine price change which can be eliminated by quality adjustment methods.
When is the indicator released?
The construction price indices are published in a press release about five to six weeks after the end of a reference month. Both the press releases and the precise release calendar are accessible as part of the Federal Statistical Office's website content.
How accurate is the indicator?
The sampling frame of construction price statistics, i.e. the group of reporting units remains relatively unchanged compared to the frame of a sample survey. If a change is effected in the sampling frame, care will be taken to ensure that the new structure of reporting units corresponds to the structure of the universe in order to adequately reflect the actual development of prices in the construction sector.
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