National Institute of Statistics (ISTAT)

Unit SED (Index of production in construction - IPC)

Economic Statistics Directorate - Short Term Statistics Division

Via Tuscolana, 1788

00173 Rome

Monthly index of total production in construction.

Nace Rev. 2 Section F;  CC breakdown: CC1 ("Buildings") and  CC2 ("Civil engineering").

Sector: Nace Rev.2 Section F

     Size classes covered

     Hours worked: in principle, enterprises with no employees or more.

     Industrial turnover: units employing 20 employees or more.

Activities covered: NACE Rev. 2 Section F

Reporting unit (s):
Hours worked: Register building workers Welfare Funds (BWWF). After collecting information on hours worked and number of manual workers of enterprises that subscribed the specific contract for the construction sector, these organizations (BWWF) transmit data to Istat.

Industrial turnover: enterprise (please, see metadata on "STS industrial  turnover index").

Observation unit(s):

KAU (for industrial turnover).

Theoretical statistical population is represented by the total of the enterprises of the construction sector (more or less 500.000 enterprises).

The area covered by the IPC is the whole national territory.

1995 is the starting point for the general index time series (coverage: Nace rev.2  section F).

From 2000 onwards also CC1 and CC2 time series are available (but not released at national level).

The base year is 2015.

Index.

Month.

Legal basis:

National level:
This is one of the mandatory surveys fixed every year by a Decree of the President of the Republic (D.P.R.).
"Monthly industrial turnover survey" and "Monthly survey on Building Workers Welfare Funds" are established by National Statistical Programme (current edition: NSP 2020-2022 Updating 2021-2022), yearly renovated and approved by a Republic Presidential decree.

European level:

The legal basis for the STS indicators are the Regulation (EU) 2019/2152 of the European Parliament and of the Council on European business statistics, repealing 10 legal acts in the field of business statistics (EBS-Regulation) and the Commission Implementing Regulation 2020/1197 laying down technical specifications and arrangements pursuant to Regulation (EU) 2019/2152 (General Implementing Act).

Obligation on units to provide data:

Hours worked: enterprises that signed the contract of the construction sector are required to provide information on hours worked to BWWF. At the moment, Istat collects these information on the basis of a compulsory monthly survey, provided for SNP.
Industrial turnover:  there is a legal requirement also for enterprises involved in the "Monthly survey on industrial turnover" (please, see metadata on "STS industrial turnover index").

Planned changes in legal basis, obligation to respond and frame used:
In 2016 Istat changed the "Monthly survey on BWWF" into a mandatory and a census survey and since 2015 rebasing the data of the total 98 BWWF have been used to compile IPC.

Data are sent only to Eurostat (not to other international organizations).

Confidentiality provisions are explicitly stated in the ISTAT President's letter attached to data collection questionnaire along with references to different acts on statistics. Links to relevant acts on statistics are presented on the website of Sistan - National Statistical System.

• Aggregated data on hours worked provided by BWWF are processed and stored in a database, but not released.
• The two indices referred to item CC1 and CC2 are only transmitted confidentially to Eurostat.
• The same applies also to the Index of production for the first transmission to Eurostat (t+45), because it occurs before the national dissemination. After the national dissemination, data become free for Eurostat.

Once a year, in December, ISTAT releases an official calendar providing the exact release dates for the coming year. The calendar is distributed to the press and is available free of charge to all the interested parties.

The release calendar is also disseminated on ISTAT's website https://www.istat.it/en/information-and-services/journalists/press-releases-/press-calendar.

Monthly.

Every month data are released simultaneously to the all interested parties by issuing the monthly press release. IPC is calculated for  NACE Rev. 2 Section F, in the unadjusted, seasonally and working day adjusted form. The press release (Italian version and English short  version) is subsequently posted on the ISTAT Internet website https://www.istat.it/it/archivio/produzione+nelle+costruzioni.
Basic information on methodological aspects concerning the index  compilation are provided through a "Methodological note", attached to the press release.

This index is not considered in other publications.

Data are disseminated in I.Stat  database, theme: "Industry and Construction, data set "Production".
The on-line database I.Stat is open and free, statistics are organised by theme in a two-level hierarchical tree. Data are presented in aggregate form in multidimensional tables; acting on variables, reference periods and the arrangement of heads and sides users can create custom tables and graphs. Datasets can be searched by keyword, theme and region.
A wide range of standard metadata facilitates the retrieval and understanding of statistics by users.

More information available in the User Guide 

Validated microdata are stored in the repository of the Institute, ARMIDA.

Data are sent to Eurostat to be used in European aggregates (CC1 and CC2 indices, confidentially transmitted to Eurostat)  and released also as national level (only the total index).

Methodology and sources of information for the index calculation are described in "Nota metodologica-Produzione nelle costruzioni-Base 2015", 28th March 2018 attached to the press release (https://www.istat.it/en/archivio/210763). Other methodological general information, even those referred to the old base 2005, are available in the document "A new index of production for the construction sector based on input data", Contributi ISTAT n.2, 2003.

A description of methodology and sources used in compiling statistics is also contained in the Information System for Survey Documentation and Quality Control (Siqual) that is available on ISTAT's Internet website SIQual. This system manages qualitative information related to each single phase of a survey's production process (https://siqual.istat.it/SIQual/lang.do?language=UK and http://siqual.istat.it/SIQual/visualizza.do?id=7779918).

More information about procedures applied for quality management and quality assessment are reported in the document "Quality Guidelines For Statistical Processes" - December 2012

Istat sticks to the quality general principles as they are stated in "ESS Handbook for Quality Report".

For more details: Quality Guidelines For Statistical Processes - December 2012

The construction production index is the result of an indirect estimate and an integration of different sources of data  (econometric model is used to estimate the relation between production and specific indicators on worked hours, intermediate consumption and capital stock). The overall quality assessment can be considered satisfactory as all the main quality requirements (e.g. completeness, user satisfaction, relevance and reliability) are met. 

The released estimates meet the relevance requirements (Eurostat and Istat National Accounts are the main institutional users). 

Other institutional or private users, as National Building Contractors' Association, are in general satisfied with Istat output, even though they  sometimes ask for  specific elaborations, not scheduled in the monthly or annual Istat agenda.

Not available.

Eurostat's requirements in terms of time series are fulfilled.

IPC is estimated using and indirect method, based on a production function. Hours worked by manual worker employed in the sector represent the first indicator used to estimate the production. Its contribution to the production estimate is 45%.  Starting from 2015, with the rebasing, data from the total  98  BWWF, covering all  the  national territory, are used to compile IPC, as  a census survey has been conducted since January 2016.  

The second variable used, explaining 45% of the output, is the turnover of industrial enterprises producing and selling building materials typically used in the construction sector (intermediate consumption). The trend and the rate of change of these two variables (hours worked  and industrial turnover) are always aligned, confirming the reliability of the two indicators in describing the evolution of the sector output. 

Hours worked: as regards hours worked, only a general assessment is available at the moment. Although they represent administrative information, data on labour input used for IPC are obtained  through a statistical survey.  Both for preliminary estimate (t+45) and for its first revision (t+75), the response  rate, at the moment  (reference year: 2022), is on average  96.9%. For the preliminary IPC estimate, 76-89 BWWF  data are used, representing  almost 86.3% of the responding units (76-89 out of 98). For the t+75 estimate, a higher number (83-90) of the responding  units is used, covering almost the 92.2% of the 98 potential responding units.

In both cases, before being used for the IPC compilation, data are generally upward revised because they are not yet not complete at the time of the first estimate (non-responding enterprises, or enterprises transmitting data to BWWF after the Istat deadline).  Correction factors, estimated on the basis of the past data, are applied to take into account the lacking information in the provisional hours worked data that enterprises transmit to BWWF. 

The correction factor is in the range 4.8%-6.7% for preliminary estimate of the hours worked index and falls within the range  1.0%-1.2% one month later, when preliminary data are revised for the first time, excluding the correction factors introduced for the months of March and April as a result of the pandemic.

After one year, when final and complete information are available, the  "adjusted"  data used for the provisional estimate are compared to them: the ratio between the total amount of hours worked revaluated (estimated) used for the provisional index and the corresponding amount available at the end of the year (final data) is usually high (now, to be recalculated).

Industrial turnover: please, see metadata on "Industrial turnover index".

Hours worked: at the moment,(reference year: 2022), the response rate is around 86,3% for the provisional estimates (t+45) and around 96,9 for the first revision estimates (t+75).

Industrial turnover: please, see metadata on "Industrial turnover index".

A provisional monthly index is confidentially sent to Eurostat 45 days after the reference period for total production and for production in "Civil engineering" and "Buildings". Differently from CC1 and CC2 indices, the general index is released through a national press release 48-50 days from the reference period. IPC is then revised the following month (first revision) and becomes final one year later (annual revision), when new National Account annual estimates of capital are taken into account and updated information on hours worked and industrial turnover can be used. 

European and national deadlines are always met. 

Data are comparable over time. No breaks in time series.

A comparison with data on building permits has been made in order to check cross domain coherence. This comparison has shown an overall coherent dynamic between the two indicators.

Italy quarterly National Accounts VA estimates are based on monthly IPC, therefore a good coherence is ensured between NA and STS figures on construction output figures.

IPC is always consistent with its sub-aggregates (items CC1 and CC2), as CC1 is obtained as a difference between CC and CC2. Internal coherence is also ensured for calendar adjusted data, as indirect adjustment is performed.

The cost estimate is compiled in terms of total number of hours worked (THW). It is equal to the product of three terms: (total) Annual Working Days (AWD), (total) Hours Worked per Day (HWD), Number of Persons involved in the Survey (NPS).

Statistical burden on BWWF that provide Istat administrative data on hours worked is not high (and no burden at all on enterprises that are required to transmit information to  BWWF for administrative reasons). Intermediate consumption and capital indices are based on Istat existing information.  

The general revision policy is predetermined,  reasonably stable from year to year and  adopted in order to incorporate new and improved information. In addition to the monthly current revisions, IPC is generally revised each year to take into account the updated data on hours worked, turnover industrial indices and the new NA estimates on annual capital stock used to estimate a monthly capital index.  Other IPC revisions can be performed when extra data are available or in case of correction due to errors in data input.

In particular, the revision policy is based on:

 - routine revisions: as data are provisional at the time of the press release, they are revised one month later for taking into account updated information and sometimes additional new information transmitted by BWWF; also monthly revisions of industrial turnover are considered;

 -annual revisions: once a year, a deeper revision is carried out  to take into account other possible updating of hours worked transmitted by BWWF, the annual revision of industrial turnover data and the new NA estimates on annual capital stock; on the occasion of the annual revision, also seasonal adjustment models are tested again.

 - major revisions performed every five years:  in the framework of the rebasing, when  revisions are  mainly due to the effects of the new weighting systems.

Users are always informed about the revisions and, at the time of each dissemination, they are also informed if data are preliminary or revised and the reasons why data have been revised are explained too (e.g. availability of additional new data, revisions/changes in data sources).

On the occasion of the annual current revision (or during the rebasing), also seasonal adjustment model can be modified, if necessary.

Coherence requirements and deadlines in the revision policy are met both for data nationally  released and transmitted to Eurostat.

As concerns non-scheduled revisions, if inaccuracies are found out, they are generally corrected with the first revision of the preliminary estimate. Otherwise, corrections are generally postponed and made when the annual revision is carried out.

Vintage database releases were stopped before the introduction of base year 2010=100  (March 2013) and they are now disseminated again.

The IPC estimate is an example of integration between statistical and administrative information.    
For the monthly updating of the index, input data are taken from different sources: administrative data on hours worked from BWWF but collected through a monthly survey; information on intermediate input from ISTAT current survey on industrial turnover, and monthly estimates of gross capital stock derived from National Accounts data.

For the base year, a production function is estimated using SBS data.

Monthly.

Questionnaires used in the survey:
Hours worked: the monthly questionnaire is filled in online by BWWF.
Industrial turnover: the monthly questionnaire is filled in online by the enterprises.

Data collection media:
Data  are collected by web site.

As a first step, the coherence of the time series of worked hours data is checked, as a total amount and for each Welfare Fund providing data. Other general checks are made on the plausibility of hours worked growth rates in comparison with the trend of the number of employees (workers) and the number of enterprises they are referred to.

Outliers are detected and investigated and responding units (BWWF) are contacted again when necessary. To identify other outliers or other reasons of possible inconsistencies, also for industrial turnover data preliminary checks are scheduled (e.g. turnover figures checked against orders). IPC is estimated after checking the global alignment between hours worked and intermediate input indices (in terms of growth rates) or investigating possible economic/statistical reasons why they are not.

As regards the output (IPC), data  can be compared with other statistical domains information. 

Hours worked: when estimating hours worked index, 'non-response' issue is not tackled, as the monthly growth rate for the current year is applied to the previous year  index and only the units responding in the two subsequent years are considered for this purpose (units responding both in the current and in the previous year). But, as construction sector enterprises might delay the data transmission to BWWF, information on hours worked are not yet complete when the provisional index has to be estimated. An upward correction is therefore necessary to take into account the lack of information (please, see 13.1).

Industrial turnover: see metadata on "Industrial turnover index".

IPC, CC1 and CC2 indices are calendar adjusted and corrected for seasonal effects by TRAMO-SEATS procedure (version 4 Linux Revision 942). Adjustment models are completely reviewed once a year and parameters are re-estimated each month, when seasonally adjusted series are revised from January 1995.

A "Reg-Arima" approach is used for working days and seasonal adjustment. A multiplicative seasonal adjustment breakdown is adopted. Calendar adjustment is performed by using Italy national calendar which also considers national holidays. Also leap year is adjusted for IPC. Easter effect, preliminary tested, resulted not significant. One transitory change and three additive outliers  have been identified for IPC. The critical value for the outlier detection and the filter length are automatically chosen, whereas model/filter selection is manual.

For calendar adjusted data the consistency of different aggregation level is ensured by the indirect calendar adjustment method (please, see point 15.4 "Coherence - internal").

None.