The former output price index of construction index

The former output price index of construction index in France Prices of construction index Gérard Vittek Head of section “index of the cost of construction and rent” 20 th to 22 th May of 2015

French NUTS 1 The former output price index of construction index in France 20 th to 22 th May of 2015

Sampling in the building permits database The sample of building permits is selected in the building permits database. New construction Construction of a house or a flat In a moving window before the beginning of the quarter. The former output price index of construction index in France 20 th to 22 th May of 2015

French output price index from the questionnaire to the database The database of French ministry of Ecology contains: Information from building permits database Information from survey database step 1 Information from survey database step 2 The first step is use to select in the building permits those which correspond to a new construction of a house or of a flat. For instance in a building, you can have some shops at he first level not the flat of the manager of the shop at the last level. In the second step, surveyors collected the prices and the quantities of items used in order to build the construction. The former output price index of construction index in France 20 th to 22 th May of 2015

French output price index from the questionnaire to the database The database of French ministry of Ecology contains: Information from building permits database : Date of the building permit Address of the construction Type of construction The former output price index of construction index in France 20 th to 22 th May of 2015

Example of the questionnaire for more than one flat The former output price index of construction index in France 20 th to 22 th May of 2015

The questionnaire and the documents asked with it The plans of the construction The contracts with the firms in which prices and quantities were compulsory. Quantity surveyor needed them to evaluate the price of the construction. The market price Date of the market price The market prices were updated to the first month of the quarter in taking in account the change of the cost index in construction BT 01 between the date of fixing of the price and the first month of the quarter. Attention: It can be dangerous when the trend of the prices change during the period. The former output price index of construction index in France 20 th to 22 th May of 2015

The work of architects (quantity surveyors) The ministry of construction updated every 10 years a catalogue of the items used in the construction of houses (~6000 items) and an other in the construction of flats (~8000 items). The catalogue contained the prices of the items fitting included. With the help of the established by the ministry of construction in 1986, architects or quantity surveyors valuated the price 1986 of the construction with the quantities of bricks, of doors, … and the prices 1986. After, this price was updated from 1986 to the middle of the previous year and corrected of the change of price of the type of construction, of the geographic area, and so on. The former output price index of construction index in France 20 th to 22 th May of 2015

The Paasche index The comparison of the market price and the estimated price of the construction give and change in price for a construction since the middle of the previous year. The weighted change in price of the sample give the evolution since the middle of the previous year and the value of the current index. Remark: if a type of construction is absent in a strata, it is not important in, a Paasche index which compare the basket of product of the quarter with the basket of the previous period (middle of the past year) in which basket the weights are those of the current basket. The former output price index of construction index in France 20 th to 22 th May of 2015

Balance sheet of this method Advantage : 1. No quality effect to estimate for an additional room or a missing room when you compare a flat with a reference flat. 2. The comparison is between the market price and the valuated price. Disadvantages : 1. The cost of the catalogue is expensive (estimated to 600. 000 euros in 2008) for a life recommended of 5 to 10 years (we used it more than 20 years…) 2. It is very difficult to take in account a changes in law or in techniques during the life of the catalogue 3. The cost of the work of the architects is about 400. 000 euros a year in 2008 4. The time of the work of the architects is a month. The former output price index of construction index in France 20 th to 22 th May of 2015

Conclusion We ought to build a new system of calculation of the producer price index of construction: • Less expensive: • we would not have 600, 000 to build a catalogue and 400, 000 euros for the work of the architects. • Quicker to produce each quarter: • it is not more possible to publish the result of the first quarter the first week of July. • Reliable from a technical point of view: • it has a legal use • Reliable for the public and the users: It goes without saying that we must produce reliable index and to convince the public that it faithful. The former output price index of construction index in France 20 th to 22 th May of 2015

Output price index for construction Thank you for your attention! Insee 18 bd Adolphe-Pinard 75675 Paris Cedex 14 www. insee. fr Contact M. Gérard Vittek Tél. : 01 41 17 51 15 email : gerard. vittek@insee. fr Informations statistiques : www. insee. fr / Contacter l’Insee 09 72 72 4000 (coût d’un appel local) du lundi au vendredi de 9 h 00 à 17 h 00