Construction Material Price Indices Methodology
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ContentsIntroduction 3Sources 3Coverage 4Application and relevance 4Publication 4Revision policy 4Range 5Calculation method 5Construction Material Price Indices 5Resource Cost Indices 6Price Adjustment Formulae Indices 8Base 9Further information 10Glossary 102
Construction Material Price Indices MethodologyIntroductionThe Department for Business, Energy and Industrial Strategy (BEIS) Construction MaterialPrice Indices (CMPIs) give a measure of the notional trend of input costs to a contractor interms of changes in the cost of building materials, i.e. factory gate prices charged by materialsmanufacturers.The indices do not take into account current market conditions experienced by a contractor ona particular project purchasing from sub-contractors, merchants or factors (i.e. materialsdiscounts or premiums paid for material resources in short supply).The compilation of the indices involves the combination of Producer Price Indices (PPI)produced by the Office for National Statistics (ONS) to produce the Price Adjustment FormulaeIndices (PAFI), published by the Building Cost Information Service (BCIS) of RICS. The PAFIare combined to produce sector Resource Cost Indices (RCIs), which were formerly producedand published by BCIS on behalf of BEIS, and are now produced and published by BCIS usingthe same methodology for their own purposes. The CMPIs are the materials content of thesector RCIs weighted by Construction Output to produce indices for: New HousingOther New WorkRepair and MaintenanceAll WorkThe indices are supplied by BCIS to BEIS for publication in Table 1 of their monthly publicationBuilding materials and components.SourcesThe data sources used to compile the BEIS CMPIs are: RCIs published by BCIS: These indices were formally produced by BEIS but werediscontinued in September 2014. BCIS has continued to calculate these indices using thesame methodology and they are published in its Public Sector Price and Cost Indicesonline service. There are separate materials cost indices for:ooooooHouse BuildingBuilding Non-HousingInfrastructureMaintenance for HousingMaintenance for Non-HousingAll ConstructionThe CMPIs are based on a combination of these indices.The RCIs are weighted averages of the PAFI. PAFI published by BCIS: The materials inputs to the PAFI are mainly the ONS PPIs.Details of the compilation of PAFI are available in Price Adjustment Formulae forConstruction Contracts: USERS GUIDE, 1990 Series of Indices, May 1995, published byHMSO (ISBN 0 11 752951 6). In summary, for the Building Formula, each Work Categoryindex is compiled as a weighted average of labour, plant and materials indices. The3
Construction Material Price Indices Methodologycomponent labour and plant indices are also published separately. For the SpecialistEngineering Formulae, separate labour and materials indices are published. See detailsin the Calculation method section below. PPIs published by ONS: A user guide and methodology is available nd-methodology Other Materials price indices compiled by BCIS: See details in the Calculation methodsection below. Value of construction output in Great Britain: current prices, non-seasonally adjusted– by sector, published by ONS: Further details are available ustry/previousReleasesCoverageThe BEIS Construction Material Price Indices are published by the Department for Business,Energy and Industrial Strategy consist of the following: Construction Material Price Index: New HousingConstruction Material Price Index: Other New WorkConstruction Material Price Index: Repair and MaintenanceConstruction Material Price Index: All WorkApplication and relevanceThe CMPIs measure the price movement, up or down, of construction materials within theabove sectors, and are used by all sides of the construction industry for assessing changes inbuilding costs.The index values are UK national averages. Regional indices are not available.PublicationThe CMPIs are monthly indices and are available on the BEIS website in a range of formats.The indices are usually published on the first Wednesday of the month.The latest provisional index values available are for two months prior to the publication month.Revision policyIndex values are normally held provisional for three months, after which they are published asfirm. The index value may change as the index becomes firm.Once published as firm, the index will not be changed for revisions in the input data. A firmindex will only be changed in exceptional circumstances: to correct publication errors or in theevent of a change in methodology. If a revision to a firm index is necessary then the index will4
Construction Material Price Indices Methodologybe marked as 'Revised' for the current publication, but this marker will be removed insubsequent publications.Changes in methodology will be recorded under Notes and definitions.Any major changes or revisions will be pre-announced, where practicable, together with thereasons for the revisions and how they are handled.RangeThere are no forecasts published.The earliest available indices are for January 1996.Calculation methodConstruction Material Price IndicesThe CMPIs are compiled by weighting together the materials only content of the followingResource Cost Indices: House Building (HOCOS)Building Non-House (NOCOS)Infrastructure (FOCOS)Maintenance for Housing (HOMACOS)Maintenance for Building Non-Housing (NOMACOS)The RCIs are weighted together to produce the CMPIs as follows:CMPIRCINew HousingHouse Building (HOCOS)Other New WorkBuilding Non-Housing (NOCOS)Infrastructure* (FOCOS)Repair and MaintenanceMaintenance for Housing (HOMACOS)Maintenance for Building Non-Housing(NOMACOS)*Note: Infrastructure includes Repair and MaintenanceThe weightings used to calculate the CMPIs are derived by multiplying the appropriatematerials proportion (materials only index divided by the combined building index) by therelevant value of construction output at the sector level.These weightings are then applied to the materials only RCIs and combined as shown in thetable above, resulting in the published CMPIs.5
Construction Material Price Indices MethodologyResource Cost IndicesThe RCIs are compiled from the PAFI.Relevant PAFI are weighted together to create sector RCIs using weights established by anindustry working party. Details of the weights used can be found in the tables below.For the building sectors, the RCIs include labour, plant and materials elements. The totalcombined base weightings of labour and plant are known so ‘labour only’ indices can becalculated. The ‘labour only’ indices are then deducted from the appropriate overall combinedsector RCI resulting in ‘materials only’ indices.For the civil engineering series, the materials only indices are available directly from the PAFI.Weights applied to PAFI Building and Specialist Engineering Series 3 to produce the buildingsector RCIsPAFI Building and Specialist EngineeringSeries 53/263/273/28DemolitionsExcavation and DisposalFilling: Imported, Hardcore andGranularPiling: ConcretePiling: SteelConcrete: In SituConcrete: FormworkConcrete: ReinforcementConcrete: PrecastBrickwork and BlockworkStoneworkSoftwood Carcassing and StructuralMembersMetal: DeckingMetal: MiscellaneousCladding and Covering: GlazedCladding and Covering: FibreCementCladding and Covering: CoatedSteelCladding and Covering: PlasticsCladding and Covering: GlassReinforced PlasticsCladding and Covering: Slate andTileCladding and Covering: LeadCladding and Covering: AluminiumCladding and Covering: CopperCladding and Covering: ZincWaterproofing: AsphaltWaterproofing: Built Up Felt RoofingWaterproofing: Liquid AppliedCoatingsBoards, Fittings and Trims:SoftwoodBase weights (June 1990 .35%1.00%1.01%1.65%3.66%1.20%3.35%2.40%6
Construction Material Price Indices 3BuildingPlumbingBoards, Fittings and Trims:HardwoodBoards, Fittings and Trims:ManufacturedLinings and Partitions: PlasterboardLinings and Partitions: Self FinishingSuspended CeilingsRaised Access FloorsWindows and Doors: SoftwoodWindows and Doors: HardwoodWindows and Doors: SteelWindows and Doors: AluminiumWindows and Doors: PlasticIronmongeryGlazingFinishes: ScreedsFinishes: Bitumen, Resin andRubber Latex FlooringFinishes: PlasterFinishes: Rigid Tiles and TerrazzoWorkFinishes: Flexible Tiles and SheetCoveringsFinishes: CarpetsFinishes: Painting and DecoratingSanitary AppliancesInsulationPavings: Coated Macadam andAsphaltPavings: Slab and BlockSite PlantingFencingPipes and Accessories: Spun andCast IronPipes and Accessories: SteelPipes and Accessories: PlasticsPipes and Accessories: CopperPipes and Accessories: AluminiumPipes and Accessories: Clay andConcreteStructural Steelwork – LabourStructural Steelwork – Materials:Building WorkStructural Steelwork – Materials:Civil Engineering 0.00%14.82%3.17%0.56%12.18%2.12%7
Construction Material Price Indices MethodologyWeights applied to PAFI Civil Engineering 1990 Series and Specialist Engineering Series 3 toproduce FOCOSPAFI Civil Engineering 1990 Series andSpecialist Engineering Series 1290/1390/1490/153/S13/S33/L13/L23/L33/L4Labour and SupervisionPlant and Road VehiclesAggregatesBricks and Clay ProductsCementsReady Mixed ConcreteCast and Spun Iron ProductsPlastics ProductsCoated Macadam and BituminousProductsDERV FuelGas Oil FuelTimberSteel for ReinforcementMetal SectionsSheet Steel PilingStructural Steelwork – LabourStructural Steelwork – Materials: CivilEngineering WorkLift Mechanical Engineering LabourLift – Mechanical Engineering MaterialsLift – Electrical Engineering MaterialsLift – Electrical Engineering LabourBase weights (June 1990 e Adjustment Formulae IndicesThe PAFI are published in three groupings: Building series which is made up of 61 work category indices, which include both labourand materials inputs and four resource indices, which include either materials or labourinputs.Civil engineering series made up of 16 resource cost indices.Specialist engineering series made up of 17 resource cost indices.Work Category indices in the Building series are compiled as a weighted average of labour,plant and materials indices, see example below. The component labour and plant indices arealso published separately. For the Specialist Engineering Formulae, separate labour andmaterials indices are published.The labour elements are derived from promulgated wage rates from various wage-fixingbodies; materials indices are based upon PPIs compiled by ONS (as well as other additionalbespoke materials indices compiled by BCIS), and plant indices are calculated using bothlabour and materials indices.8
Construction Material Price Indices MethodologyThe materials content of the PAFI are, in the main, based on ONS PPIs. PPIs measure theprice of goods bought and sold by UK manufacturers.BCIS produces the following series for use in compiling PAFI to supplement the PPIs: reinforcing steel bar (rebar)steel mesh reinforcementsteel sectionshollow steel sectionsstainless steelaluminiumzinccopperleadgrass seedtrees and shrubsExample Compilation and Constituents of a Building Work Category IndexCompilationThe Work Category Indices are compiled from labour, plant and materials indices as required,incorporating price levels current at the following dates:Labour:The 15th day of the month to which the Index number refers.Plant:The month to which the Index number refers.Materials: The month preceding that to which the Index number refers.ConstituentsThe composition and base weightings are given in the table below.WORK CATEGORY3/01DEMOLITIONSRESOURCEBASE WEIGHTING%Labour: building51Plant43Steel shoring4Timber2TOTAL100%BaseThe indices are currently set at 100 at the base year of 2010 and are rebased every five yearsin line with other government statistics.9
Construction Material Price Indices MethodologyFurther informationEnquiries about the indices should be addressed to BCIS: support@bcis.co.uk.The responsible statistician at the Department for Business Energy and Industrial Strategy isFrances Pottier. She can be contacted at Frances.Pottier@beis.gov.uk.The Resource Cost Indices (formerly BEIS) are published by BCIS in its Public Sector Priceand Cost Indices online service.The Price Adjustment Formulae Indices (PAFI) are published by BCIS in its Price AdjustmentFormulae Indices (PAFI) online service.Construction Output Price Indices are now published by the Office for National Statistics. Theycan be contacted at construction@ons.gsi.gov.uk.GlossaryCost: The cost paid by a contractor or other purchaser to a manufacturer.Infrastructure: The RCI and CMPI for Infrastructure include maintenance.Price: In the context of these indices ‘price’ is the factory gate price charged by manufacturers,it is therefore the cost paid by the contractor or other purchaser.Price Adjustment Formulae Indices: Monthly indices used in conjunction with the FormulaMethods of adjusting building, specialist engineering and civil engineering contracts to allow forchanges in the costs of labour, plant and materials. They are published by the Building CostInformation Service of RICS. Further details of the indices are available ic Sector Price and Cost Indices: BCIS Online service containing the Resource CostIndices previously published by BEIS. Further information on the Public Sector Price and CostIndices is available at: s/United Kingdom (UK): Great Britain and Northern Ireland.10
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Construction Material Price Indices Methodology Introduction The Department for Business, Energy and Industrial Strategy (BEIS) Construction Material Price Indices (CMPIs) give a measure of the notional trend of input costs to a contractor in terms of changes in the cost of building materials, i.e. factory gate prices charged by materials
price and construction cost indices overview Statistics Explained Source : Statistics Explained . an index for material costs and an index for labour costs are available. Material and labour costs represent the most important cost components for . The CCI is made up of aggregated price indices for materials, labour costs and other types of .
2. Background to the construction price and cost indices The construction price and cost indices are published by BIS6 and are primarily used by ONS to deflate its estimates of construction output, which comprise about 6.3% of Gross Domestic Product (GDP) when measured from the output approach. ONS also use the
Construction Materials Price Indices, January 2020 Table 2 - Construction input price index (CIPI): material purchases by type of service Service Weight Index (Dec 2016 100) Percentage change Jan 2019 Dec 2019 Jan 2020 Jan 2020 vs. Dec 2019 Jan 2020 vs. Jan 2019 Total construction 100,00 112,5 114,8 115,4 0,5 2,6
Manual on Producer Price Indices ' prepared by the IMF. 3, the Eurostat -OECD ' Methodological Guide for Developing Producer Price Indices for Services ' 4, and the ' Manual on Consumer Price Indices ' prepared by the ILO. 5 6the ' Export and Import Price Index Manual ' prepared by the IMF
France and the United Kingdom. 5. Unit value and quantum indices As mentioned above, the unit value indices for the various countries are, in most cases, official national indices linked together, adjusted for exchange rate variations and switched to the base 1953 100. The indices for manufactured goods are those national indices which cover a
current price rate by the corresponding base period price rate. The weighted arithmetic average of the price relative of the varieties is taken as the material/labour index. The weighted arithmetic average of these Material price Indices and Labour Wage Indices is the General Building Construction Cost Index. Symbolically P j P ij /P oj Where
Feb 107,4 r 109,6 111,4 113,5 112,3 109,1 r 111,0 r 109,2 Mar 111,9 109,9 111,4 116,8 111,8 110,5 112,2 111,0 . STATISTICS SOUTH AFRICA 6 P0151.1 Construction Materials Price Indices, March 2019 Table 2 - Construction input price index (CIPI): material purchases by type of service Service Weight .
Your sheet-pile program FADSPABW (B-9) is a special case of this method. It was separately written, although several subroutines are the same, because there are special features involved in sheet-pile design. These additional considerations would in-troduce unnecessary complexity into a program for lateral piles so that it would be a little more difficult to use. Many consider it difficult in .
