Insee (Institut National de la Statistique et des Etudes Economiques), the French NSI.

Direction des Statistiques d’Entreprises \ Département des Statistiques de Court Terme \ Division des Indices de Prix à la Production.

(Directorate of Business Statistics\ Department of Short Term Statistics\ Division of Producer Price Indices).

INSEE

Division IPP - timbre E310

88 avenue Verdier

CS 70058

92541 Montrouge cedex

France

The producer cost indices for construction are composite indices of costs which are derived from several cost items in an analytical accounting process similar to the “KLEMS” approach used by economists in relation to productivity (where K = capital for “equipment”, L = labour, E = energy, M = materials, S = services for “miscellaneous costs”), to which T = transport have been added. They are the statistical "twins" of the building (BT), civil engineering (TP) and various indices for construction, which are used for contract escalation. The producer cost indices for construction are subject to revision and are used for national accounts, macroeconomic analysis and international comparisons.

In order to fulfil requirements of annex B of European STS regulation, activity 41.2: construction of buildings has been selected (variable 320), with cost items materials (variable 321) and labour (variable 322)

NACE Rev. 2.

The entire section F of the construction is covered, except for the group “41.1 – development of building projects” and the subclass “43.99E – renting of construction equipment with operator”. The indices are completely defined in accordance with the NAF 2015, with the groupings “building” and “civil engineering” commonly used by professionals.

The grouping “building” includes the activities “41.2 - construction of residential and non-residential buildings” and “43 except 43.1, 43.21B and 43.99E: specialised construction activities except demolition and site preparation, installation works of electrical wiring and fittings on public thoroughfare and renting of construction equipment with operator”.

The grouping “civil engineering” includes the activities “42 - civil engineering”, “43.1 – demolition and site preparation” and “43.21B - installation works of electrical wiring and fittings on public thoroughfare”.

List of producer cost indices for construction and their articulation with the NAF 2015

The producer cost indices for construction are cost indices, which are derived from 6 line-items in an analytical accounting process similar to the “KLEMS” approach used by economists in relation to productivity (where K = capital for equipment, L = labour, E = energy, M = materials, S = services for “miscellaneous costs”, to which T = transport has been added).

The articulation between the items in the indices and the lines in the general accounting plan are as follows, considering that the item “transport” has been given priority over all the other items, subcontracting has been removed from production, the heading “miscellaneous costs” has been capped, and only costs that can be linked to a specific construction site are assumed to be taken into account:

The weighting of each item in each index is determined by the account analysis of the involved businesses (or the involved construction works).

Similarly, each item is broken up into basic indices (of cost or price) derived from public statistics, with a weighting.

The weightings at all levels of aggregation are sourced from the confrontation between the 2012 and 2015 Structural Business Survey in construction and the studies of the professional unions studies in the framework of the preparation of the Buildings (BT) and Civil engineering (TP) indices in base 2015 for contract escalation. The weightings of the items and basic indices are normally fixed for the duration of the base but the adopted calculation formulas could allow an update of the weightings throughout the duration of the base.

Kinds of activity units/construction of works are the statistical units surveyed for cost items' weights.

Not available. The indicator is based on primary sources.

French economic territory = metropolitan France + overseas departments.

Opise survey covers the whole French economic territory.

Indeed, French "Enquête Structurelle Annuelle dans la construction" (SBS survey in construction), used for assessing weights, covers the whole French economic territory. But, in practice, confrontation with selected construction enterprises analytical accounting has only concerned metropolitan French businesses.

Labour Cost Index covers the whole French economic territory.

ESA 2012 and ESA 2015 have provided weights for cost items.

Calculations from elementary indices and weights have been processed since 1998.

Eurostat has required for chaining between 1993 and 1998, on the basis of old series (issued from building index BT01, processed by Ministry of ecology, in charge of construction, with the help of businesses federations).

ESA 2012 and ESA 2015 have provided weights for cost items.

Reference period is average year 2015 from June 2018.

Indices have no explicit unit (of course, French cost indices are expressed implicitly in euro).

Reference period is average year 2015.

European regulation on short term statistics n° 1165/98 modified 461/2012 requests in annex B - construction

There is no data sharing with other international organizations.

These series are disseminated on French BDM website: https://www.insee.fr/en/recherche/recherche-statistiques?q=Producer%20costs%20indices%20for%20construction&debut=0&categorie=10

Labour cost is issued from French Labour Cost Index (LCI) in construction (disseminated on its own to Eurostat in employment statistics).

Material cost is common with BT01 building index used for contract escalation (except this cost item is revised for statistical purpose).

All Insee statistics are regulated by the 1951 law about statistics.
There is no special survey for producer cost indices in construction, but a re-use of "Opise" survey on industrial producer price indices (and some SPPI, CPI,...).

Every surveyed firm (by "Opise" survey or others) is provided with information on statistical confidentiality.

These indices use public series and some other ones under statistical secret (which disappears after aggregation).

The calendar is public and can be found on the INSEE website : https://www.insee.fr/en/information/2107811?debut=0

A quarterly "Informations rapides" is published around 20th of the third month after the month under review. Each publication indicates the date of next issue.

On Insee website, a page is dedicated to this "Informations rapides" on producer cost indices in construction: https://www.insee.fr/en/statistiques?debut=0&theme=30&conjoncture=54

Users can read the date of the next issue in the latest publication.

The release to all usual information media takes place on the same day.

No internal government access to data is possible before release.

Data are transmitted to Eurostat every month, using SDMX format.

These indices are also used by National Accounts.

All monthly indices of a quarter are simultaneously released quarterly, at T+80.

Till 2017Q1, there was a monthly release. This avoids main revisions due to Labour Cost Index estimations.

An "Informations rapides" is released simultaneously with the dissemination of series: https://www.insee.fr/en/statistiques?debut=0&theme=30&conjoncture=54

No government ministry is involved in the writing or the reading of this news release.

The Informations rapides is available on https://www.insee.fr/en/statistiques?debut=0&theme=30&conjoncture=54

The European variables are available online:

https://www.insee.fr/en/statistiques/series/110551718

Other producer cost indices are also available:

The series in base 2010 can be reached on: https://www.insee.fr/en/statistiques/series/102327749

Not applicable.

Most elementary indices used as components of cost items are already disseminated on the INSEE website

Very similar cost indices in construction (building (BT), civil engineering (TP) and various indices for construction) are published for contract escalation :

https://www.insee.fr/en/statistiques/series/103173847

Documentation about these series is available on : https://www.insee.fr/en/metadonnees/source/indicateur/p1662/description

Every month, most important price developments are scrutinized.

The European statistics code of practice is implemented as far as possible in "Opise" survey on industrial producer price indices and services producer price indices.

These series are the main source of producer cost indices in construction.

The quality management of industrial producer price indices applies for producer cost indices in construction.

The producer cost indices for construction are primarily used for national accounts, macroeconomic analysis and international comparisons, because of lack of producer price indices.

They should never be used for contract escalation: other dedicated series exist for this purpose.

National accountants have been solicited and have said they were very satisfied with this kind of indices, completing the available producer price indices.

The scope of European regulation is covered (construction of new residential buildings).

More broadly, section F: construction is well covered, with the exception of group 41.1: Development of building projects.

Sampling error should be negligible for determination of cost items' weights on 2015 year (from SBS in construction).

Accuracy of industrial producer price indices is convenient (no bias, small revisions).

Labour cost index is slightly revised.

Producer cost indices are normally revised once, sometimes more because of Labour Cost Index.

There is no sampling error strictly speaking as France uses a cut-off technique to select firms.

Sampling error could happen in determination of weights (on year 2015), but it should be negligible at this aggregated level.

For PPI and SPPI inputs :

Possible multiple listings are identified when field surveyors visit firms. Professional unions are requested by Insee about under-coverage and over-coverage, so that both are limited when an activity is "refreshed". When time goes by, under-coverage is able to grow: new firms are created and they are not surveyed, new products are sold, and they are seldom surveyed (firms are able to "change products" for Opise, but they don't do it so frequently).

First dissemination is done every quarter, about T + 80, then revised once, sometimes more (because of Labour Cost Index).

Labour cost index is quarterly, the other cost items are monthly.

The published calendar has always been respected so far.

PPI and LCI are comparable with other European countries, in particular Germany.

Data have been compiled homogeneously since January 1998 (backcasting).

They have been chain-linked with past series between January 1993 and January 1998, on the basis of less homogeneous methods and sources.

Producer cost indices in construction are consistent with PPI in material cost and LCI in labour cost by method of compilation.

Confrontation with other data sets confirm their relevance: comparison with producer price index in construction of new residential buildings: https://www.insee.fr/en/statistiques/series/110551853

Producer cost indices in construction are comparable to buildings (BT) and civil works (TP) indices.

Producer cost indices in construction are statistical indices whereas BT and TP indices are used for contracts' escalation.

Contrary to  BT and TP indices, producer cost indices in construction may be revised and their assessment requires less data.

By mean of several levels of aggregation (elementary indices in cost items, cost items in activities indices, sub-activities indices in broader activities indices), aggregates are always consistent with sub-aggregates.

The cost for Insee is about 0,1 Full Time Equivalent of a category A, because inputs are already assessed for other purposes (industrial producer price indices, producer price indices for services, labour cost index).

These indices can be revised with no limit of time.

These indices are revised once for most cost items, but labour cost item can be revised more often.

Producer Price Indices for Materials, Equipment, Energy and Services cost items on one hand, and Labour cost index for labour cost item on the other hand are the most important sources.

The data collection is monthly (labour cost index quarterly).

The data collection does not use a survey. The data are collected in Insee databases (either Insee website for public series, either Insee database for PPI series covered by statistical secret)

Quarterly, with the analysis of the change in price for each cost item.

The producer cost indices for construction in base 2015 are Laspeyres-chained indices in reference year 2015.

The items are obtained by the aggregation of the elementary indices:

 where CI is the costs item, j the elementary index.

Then the activity indices of the first level (41.2, 42, 43BTC, 43BTR, 43TP) are obtained through the aggregation of costs items:

where I is the activity index of the first level, CI the cost item.

Lastly the activity indices of higher aggregated levels (43, BT, TP, F) are obtained through the aggregation of the activity indices of the first level:

where IND the activity index of higher aggregated levels, I the activity index of the first level.

No seasonal adjustment is practiced in price or cost indices.

Metadata documentation can be found on Insee website : https://www.insee.fr/en/metadonnees/source/indicateur/p1662/description