Apartment Building Construction Price Indexes (ABCPI)

Detailed information for first quarter 2001

Status:

Inactive

Frequency:

Quarterly

Record number:

2330

The Apartment Building Construction Price Index (ABCPI) measures changes in contractors' selling prices of a representative apartment building. The indexes relate to both general and trade contractors' work and exclude the cost of land, design and real estate fees.

Data release - May 14, 2001

Description

The Apartment Building Construction Price Index (ABCPI) measures changes in contractors' selling prices of a representative apartment building. The indexes relate to both general and trade contractors' work and exclude the cost of land, land assembly, design, development and real estate fees.

The ABCPI is of particular use to government agencies undertaking economic analyses and other users that are concerned about the impact of price changes on capital expenditures. Statistics Canada, for example, uses the ABCPI in preparing estimates of the contribution of the construction industry to national expenditure, real output and capital stock. Other uses include the revaluation of expenditure, output and new order figures for construction work, updating previously costed projects, making adjustments to project cost for escalation, forecasting financial requirements for proposed projects and real rates of return on investment.

Reference period: The time period for which the ABCPI equals 100; currently this is the year 1997.

Collection period: Collection occurs over the second and third months of each quarter, i.e. February and March, May and June, August and September, November and December.

Subjects

  • Construction
  • Construction price indexes
  • Prices and price indexes
  • Residential construction

Data sources and methodology

Target population

The target population of the ABCPI consists of those general and trade contractors that are primarily engaged in the construction of apartment buildings. They must be well established and actively bidding and winning a share of the jobs in one of the seven CMA's (Halifax, Montréal, Toronto, Calgary, Edmonton, Vancouver and the Ontario part of the Ottawa-Gatineau CMA)included in the survey. These are usually members of local associations such as construction or trade associations and have been in the business long enough to be well established and knowledgeable and capable in their pricing. As these respondents are testing the market on virtually a daily basis, it is felt that the responses from the rest of the industry would show very similar price movement.

Sampling

This is a sample survey with a longitudinal design.

Sample items of work-in-place to be priced were selected from an actual apartment building. All prices are collected directly by Statistics Canada quantity surveyors and include costs for materials, labour, equipment, relevant provincial taxes, and contractor's overhead and profit. Value Added Taxes such as the Federal Goods and Services Tax, the Quebec Sales Tax and Harmonised Sales Tax are not included. Prices were collected annually from 1981 to 1987 for Montreal, Toronto, Calgary and Vancouver. Since the fourth quarter 1987 prices are collected quarterly for the original four cities and for Halifax, Ottawa and Edmonton. The prices for work-in-place are obtained through phone surveys from trade-contractors and general contractors on the basis that they are bidding on a fixed specification and quantity in the real market and as such, include the current overhead, profit and market conditions. Prices for certain materials, labour rates, rental of equipment, municipal charges and sales taxes are obtained from a variety of secondary sources, particularly for the mechanical and electrical trades. Weights are derived from detailed cost analysis of the structure wherein quantities or values for the model were expressed in 1992 price levels.

Error detection

In the day-to-day collection and processing of the index, great emphasis is placed on the examination and evaluation of prices. Survey staff and quantity surveyors of Statistics Canada knowledgeable of the construction industry watch closely developments in the markets. They review the behaviour of the reported price changes, both to validate them directly and to ensure they are representative of apartment building construction prices movement as a whole. Outliers and incorrect or suspicious prices are identified during the initial data processing and then follow-ups are carried out with the respondents to ensure the appropriate information has been obtained.

Estimation

Models of major trade activities are priced and weighted up to simulate whole structure price movement. Lesser trade activities are prorated.

Disclosure control

Statistics Canada is prohibited by law from releasing any information it collects which could identify any person, business, or organization, unless consent has been given by the respondent or as permitted by the Statistics Act. Various confidentiality rules are applied to all data that are released or published to prevent the publication or disclosure of any information deemed confidential. If necessary, data are suppressed to prevent direct or residual disclosure of identifiable data.

Collected data are converted to price indexes and data are released as such, so that it is not possible to identify the suppliers of raw prices.

Data accuracy

Confidence intervals are not calculated due to the nature of the survey. Trade total and aggregate level indices are felt to be statistically reliable.

The statistical accuracy of the ABCPI depends on price data and weight information. Price data are obtained from a subjective sample survey. The weights used in the model come from an actual cost breakdown of constructing a representative building model at a certain point in time, while at the CMA level, building permit data are used. The price and weight data are subject therefore to their own errors. The quality of the weight data used in the model depends on its timeliness, where in general, the longer a model is kept the less it reflects the current change in input mix and construction technologies. The quality of the city weights is dependent on the underlying quality of the Building Permits Survey, residential and non-residential values by type of structure for Canada and urban centres 10,000 and over.

The accuracy of the price data is determined by the ability to maintain a representative sample and the level of respondent co-operation. In this regard, the sample for the ABCPI is reviewed on a continual basis using all available market information in order to identify and select relevant companies (i.e. those winning bids or contracts and doing work). In addition, the response rate for those companies selected is approximately 95%.

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