Building Construction Cost Index Jaipur Center 2001-2015

BUILDING CONSTRUCTION COST INDEX JAIPUR CENTRE( 2001 TO 2015 )DIRECTORATE OF ECONOMICS & STATISTICS,PLANNING DEPARTMENT, RAJASTHAN, JAIPUR

Government of RajasthanDirectorate of Economics & Statistics,Department of Planning, Rajasthan, Jaipur

Director and Joint SecretaryDirectorate of Economics and StatisticsDepartment of PlanningPREFACEThe Cost of Construction of residential houses hasundergone a tremendous change during the past decades. TheDirectorate of Economics and Statistics is regularly computingIndices for Construction of Residential house building for JaipurCentre with the base 1971 100. The publication gives annualand quarterly average Indices of Prices of Building Material andof Labour engaged in construction of houses, besides GeneralCost of Construction Index from 2001 to 2015. An attempt hasbeen made to incorporate the changes in index number of pricesduring these years, so that a view of changes reflected from 2001to 2015 could be taken. Percentage variation over previous yearand average increase in Indices per year have also been workedout and included in the report.The methodology for weighting diagram used for computingof the Indices and proforma used for collection of prices ofBuilding Material and Wage rate of different category of Labourengaged also forms a part of the report. It is hoped that thereport will be useful in studying the changes in the Cost ofConstruction of houses in Jaipur. Suggestions for improvement,if any, would be most welcome.JaipurOctober, 2016(Om Prakash Bairwa)

Officers / Officials associated with this publicationJoint DirectorShri Raj Kumar PandeyStatistical OfficerShri Rajendra Prasad ChuletAssistant Statistical OfficerShri Gopal Lal Gupta

CONTENTSS. NO.SUBJECTPAGE NO.1INTRODUCTION/ COLLECTION OF PRICES & CHOICE OF BASEYEAR12WEIGHTING SYSTEM23METHODOLOGY OF CONSTRUCTION OF THE INDEX NUMBERS34REVIEW & ANALYSIS OF DATA45INDEX NUMBERS OF COST OF BUILDING MATERIAL6INDEX NUMBERS OF WAGES OF CONSTRUCTION LABOUR8-.107INDEX NUMBERS OF GENERAL COST OF CONSTRUCTION11-.138QUARTERLY INDICES OF COST OF BUILDING MATERIAL,LABOUR & GENERAL COST OF CONSTRUCTION14-319LIST OF COMMODITIES & THEIR VARIETIES WHICH AREINCLUDED IN THE INDEX OF BUILDING MATERIAL32-3410CATEGORIES OF WORKERS WHICH ARE INCLUDED IN INDEXOF WAGES OF LABOUR ENGAGED IN CONSTRUCTION OFBUILDING5-.735

Index Numbers of Building Construction Cost, Jaipur centerIntroductionThe object of preparing the index numbers of cost ofconstruction of houses is to measure relative changes in the valueof construction of a house of the same type and size at a placeover different points of time because during the recent years therehas been a continuous rise in the cost of construction of buildings.The building construction cost depends on two factors viz cost ofmaterials used and cost of labour employed. The Directorate ofEconomics & Statistics has been collecting and compiling the dataon prices of building materials and wages of building constructionlabour on quarterly basis since 1971. In this report, an attempthas been made to study the trends in the prices of buildingmaterials and wages of construction labour for Jaipur center forthe period from 2001 to 2015 with 1971 100 as the base year.This has been done with reference to the low income group housesconstructed by Rajasthan Housing Board at Jaipur only.Collection of pricesThe prices data have been collected through official source(Office of Deputy Director, Economics & Statistics, Jaipur) onquarterly basis. The prices are those which were actually paid bythe builder for specific quality of material/labour.Choice of base yearIn the existing building construction cost index the year1971 has been taken as the base year. This year was chosen as itwas considered to be a normal year from the point of view terials/labour.

Weighting SystemsIn the existing series (base 1971 100), weights havebeen divided as the proportion of expenditure incurred on eachitem of building material and labour in relation to the total costinvolved in construction of a residential house on plot size 20’ *50’(two roomed low income group house) constructed by RajasthanHousing Board at Jaipur in 1971. The weighting diagram soderived is given below 61.04 percent weighting is for buildingmaterial and 38.96 percent on labour.Weighting diagram used for the Construction of Building CostIndices for Jaipur.(A) Building Material61.041.Bricks0.862.Sand7.363.Stone 338.Stone Slabs, Asbestos Cement Sheets & Tiles8.229.Paint & Varnish0.8712.1210. Sheet Glass0.8711. Sanitary Wares8.66(B) INDEX FOR LABOUR38.961. Mason19.052. Carpenter3. Un- Skilled LabourTOTAL (A B)1.7318.18100.00

Methodology of construction of the IndexThe weighted arithmetic average method (Laspeyer’s fixedbase) is used for the computation of the index for each variety ofmaterial/labour, the price relative is computed by dividing thecurrent price rate by the corresponding base period price rate. Theweighted arithmetic average of the price relative of the varieties istaken as the material/labour index. The weighted arithmeticaverage of these Material price Indices and Labour Wage Indices isthe General Building Construction Cost Index.SymbolicallyPj Pij/PojWhere Pij price at time i of commodity jPoj price at time o of commodity jPj price relative for commodity jIg j Wgj Pj/ j Wg jWg j Weight for commodity j of the group GIg Group index i.e index for building material/labourIb g Wg Ig / g WgWhereWg j Wg j g Wg 100 (Total Weights)andIb General building construction cost index.

The index are at present worked out on quarterly basis, whichare further converted into annual index by simple averaging of thequarterly index numbers.ReviewThe index numbers of prices of buildings materials and ofwages of building construction labour have been prepared forJaipur Centre with 1971 100 as base, for the items of buildingmaterial and labour indicated under the weighting diagramalready given. The list of commodities with specifications for whichprices were collected are given in Appendix I. The categories ofworkers for which the wage rates were collected are given inAppendix-II.Analysis of dataTable No 1 reveals the Index Numbers of Cost ofConstruction Material of a residential house for the period 2001 to2015. It is observed from this table that over the years, the pricesof building materials have been continuously rising. This highestincrease in the prices of building material over the previous yearwas recorded in the year 2011 (30.45%) followed by the years 2012(18.77%) and 2006 (11.35%). The lowest increase of 1.66% wasrecorded in 2005 over 2004.The Index Numbers for Wages of Construction Labour for theperiod 2001 to 2015, It is seen from this table that the IndexNumbers for Labour Wages are also continuously rising thoughnot uniformly. The highest increase of 35.38 percent in a year wasrecorded in 2011 over 2010 followed by the years 2012 (28.38%)and 2009 (19.39%). The lowest increase i.e. negative -2.20 percentwas recorded in 2003 over 2002.Table No. 3 (Combination of Table No.1&2) shows the IndexNumbers of Total Building Constructed Cost including materialsand labour. It is observed from this table that there is continuousrise in the index numbers of cost of construction of houses inJaipur city. The General Index of Cost of Construction has risen to6371.45 in 2015 from 1766.65 in 2001. The lowest increase of0.09% over the preceding year was registered in 2003 and thehighest was 32.96% in 2011, followed by 23.73% in 2012 and11.96% in 2008.

Table-1INDEX NUMBERS OF COST OF BUILDING MATERIAL FOR JAIPUR CENTRE AND ITSVARIATION OVER PRECEDING YEARBASE (1971 100)S. No.YEARINDEX NUMBERS OF COSTOF BUILDING 90.695.44PERCENTAGE VARIATIONOVER PRECEDING YEAR

COST OF BUILDING MATERIAL INDEX FOR JAIPUR CENTERBASE 1971 00.000.0020062007201020112012201320142015

COST OF BUILDING MATERIAL INDEX FOR JAIPUR CENTERBASE 1971 52006200720082009201020112012201320142015

Table-2INDEX NUMBERS OF WAGES OF COSTRUCTION LABOUR FOR JAIPURCENTRE AND ITS VARIATION OVER PRECEDING YEARBASE (1971 100)S. No.YEARINDEX NUMBERS OF COSTOF BUILDING 159631.4511.45PERCENTAGE VARIATIONOVER PRECEDING YEAR

WAGES OF CONSTRUCTION LABOUR INDEX FOR JAIPUR CENTREBASE 1971 2012201320142015

WAGES OF CONSTRUCTION LABOUR INDEX FOR JAIPUR CENTREBASE 1971 2012201320142015

Table-3INDEX NUMBERS OF GENERAL COST OF CONSTRUCTION FOR JAIPURCENTRE AND ITS VARIATION OVER PRECEDING YEARBASE (1971 100)S. No.YEARINDEX NUMBERS OFCOST OF BUILDINGMATERIAL 0PERCENTAGE VARIATIONOVER PRECEDING YEAR

GENERAL COST OF CONSTRUCTION INDEX FOR JAIPUR CENTREBASE 1971 020112012201320142015

GENERAL COST OF CONSTRUCTION INDEX FOR JAIPUR CENTREBASE 1971 020112012201320142015

BUILDING MATERIAL AND LABOUR INDEX FOR JAIPUR CENTREBASE (1971 100 )ITEM / QUARTERBUILDINGMATERIALINDEXINDEX OFLABOURGENERAL 1902.09AVERAGE1628.702286.511884.98

BUILDING MATERIAL AND LABOUR INDEX FOR JAIPUR CENTREBASE (1971 100 )ITEM / QUARTERBUILDINGMATERIALINDEXINDEX OFLABOURGENERAL 3156.45AVERAGE2382.623837.842949.58

BUILDING MATERIAL AND LABOUR INDEX FOR JAIPUR CENTREBASE (1971 100 )ITEM / QUARTERBUILDINGMATERIALINDEXINDEX OFLABOURGENERAL 6360.53AVERAGE4290.699631.456371.45

INDEX OF BUILDING CONSTRUCTION COSTBASE YEAR 1971 100CENTRE -JAIPURYEAR 2001S.NO.WEIGHTA.BUILDING MATERIAL1Bricks2Sand3Stone Ballast4Lime5Timber6Cement7STEEL8SLABS SHEET, TILES9PAINT & VARNISH10SHEET GLASS11 Sanatory WaresINDEX OF 65LABOUR1. Manson2. Carpenter3. Un- Skiled Labour(A) MALE(B) FEMALEINDEX OF LABOURGENERAL 01730.231789.921772.831773.601766.65

INDEX OF BUILDING CONSTRUCTION COSTBASE YEAR 1971 100CENTRE -JAIPURYEAR 2002S. NItemA.BUILDING MATERIALQUARTERWEIGHT1Bricks2Sand3Stone Ballast4Lime5Timber6Cement7STEEL8SLABS SHEET, TILES9PAINT & VARNISH10 SHEET GLASS11 Sanatory WaresINDEX OF .822782.612782.612782.612782.612782.61LABOUR1. Manson2. Carpenter3. Un- Skiled Labour(A) MALE(B) FEMALEINDEX OF LABOURGENERAL 01769.441787.721800.491809.081791.68

INDEX OF BUILDING CONSTRUCTION COSTBASE YEAR 1971 100CENTRE -JAIPURYEAR 2003S. NItemA.BUILDING MATERIALQUARTERWEIGHT1Bricks2Sand3Stone Ballast4Lime5Timber6Cement7STEEL8SLABS SHEET, TILES9PAINT & VARNISH10 SHEET GLASS11 Sanatory WaresINDEX OF . Manson2. Carpenter3. Un- Skiled Labour(A) MALE(B) FEMALEINDEX OF LABOURGENERAL 01808.871784.571767.831812.101793.34

INDEX OF BUILDING CONSTRUCTION COSTBASE YEAR 1971 100CENTRE -JAIPURYEAR 2004S. NItemA.BUILDING MATERIALQUARTERWEIGHT1Bricks2Sand3Stone Ballast4Lime5Timber6Cement7STEEL8SLABS SHEET, TILES9PAINT & VARNISH10 SHEET GLASS11 Sanatory WaresINDEX OF .861938.83 1986.45 2110.50 2010.502011.577.362283.27 2283.27 2133.66 2198.262224.628.662190.23 2190.23 2139.14 2190.232177.4612.121282.05 1282.05 1282.05 1282.051282.054.763001.91 3001.91 3001.91 3001.913001.914.331238.24 1214.73 1081.50 1097.181157.914.331257.18 1358.47 1301.33 4 1220.14 1220.14 894.818.661312.03 1312.03 1373.46 1373.461342.7561.041607.67 1613.86 1584.12 1602.441602.0219.052106.79 2106.79 2106.79 2106.792106.791.732034.06 2034.06 2034.06 2034.062034.0618.182482.22 2482.22 2482.22 2482.222482.222181.82 2181.82 2181.82 2181.822181.822782.61 2782.61 2782.61 2782.612782.61LABOUR1. Manson2. Carpenter3. Un- Skiled Labour(A) MALE(B) FEMALEINDEX OF LABOURGENERAL INDEX38.962278.75 2278.75 2278.75 2278.75 2278.75100.001869.12 1872.90 1854.75 1865.93 1865.68