Architectural, Engineering and Related Services Price Index (AESPI)

Detailed information for second quarter 2019

Status:

Active

Frequency:

Quarterly

Record number:

5196

The purpose of this survey is to measure the price change of architectural, engineering and related services on a quarterly basis.

Data release - September 13, 2019

Description

The Architectural, Engineering and Related Services Price Index (AESPI) is a longitudinal quarterly survey that collects information on the prices of architectural, engineering, and surveying and mapping services. Architectural services are divided into two categories, Architecture and Landscape Architecture. Survey and mapping services are delineated into geophysical and non-geophysical categories.

The AESPI series is a useful indicator of economic activity in the architectural, engineering and related services industry, and can also prove helpful as a supplementary tool for performance evaluation, cost monitoring, contract assessment and benchmark comparisons. In addition, the index is used by the Canadian System of Macroeconomic Accounts to arrive at estimates of real value-added Gross Domestic Product (GDP) for the industry and to measure changes in productivity.

In order to follow the price of a constant-quality service over time, this survey adopts the model-pricing approach: The 'model' is the basis of the Model Contract Pricing Method used in this survey and also used by many other national statistical institutions. This model is intended to capture realistic details of the price components (cost of direct labour utilised, overhead, profit and other applicable direct costs) of a typical project. While adjustments can be made from time to time, the model is intended to remain static in order to measure changes arising from the price components only.

Statistical activity

These indexes are a part of the Services Producer Price Index program (SPPI) at Statistics Canada.

The SPPI program develops and produces price indexes for a number of business service categories. This initiative fills an important data gap in the area of economic statistics, has resulted in a more comprehensive set of service price indexes, and allows Statistics Canada to produce more accurate estimates of real-value added (Gross Domestic Product) and changes in productivity.

Reference period: The time period for which the AESPI equals 100; currently this is the year 2018.

Collection period: Data collection occurs over an eight-week long period beginning on the 15th (or the next business day) of the second month of each quarter.

Subjects

  • Prices and price indexes
  • Service price indexes

Data sources and methodology

Target population

The target population consists of establishments classified on Statistics Canada's Business Register to the NAICS industry 5413 - Architectural, Engineering and Related Services. There are five (5) industries classified under NAICS 5413 and from which the AESPI will collect data; these are:

- 541310 Architectural services
- 541320 Landscape architectural services
- 541330 Engineering services
- 541360 Geophysical Surveying and Mapping services
- 541370 Surveying and Mapping (except Geophysical) services

The target population differs from the survey population in that businesses comprising the bottom 10-percentile of the revenue of the NAICS 5413 industry are not included in the survey population. This is done to reduce response burden on smaller firms.

Instrument design

In August of 2015 the first electronic version of the AESPI questionnaire was sent to respondents. This electronic questionnaire (EQ) was developed based on the paper version of the questionnaire. The EQ was focus-group tested with actual respondents during the spring of 2015. This focus group testing was performed by Statistics Canada's Questionnaire Design Resource Center in Montreal, Toronto and Calgary.

Sampling

This is a sample survey with a cross-sectional design and a longitudinal follow-up.

The target sample is 700 establishments.

The total sample size was first allocated to each NAICS by revenue and then additional units were added to meet a minimum number of units sampled in each geographical region.

Data sources

Responding to this survey is mandatory.

Data are collected directly from survey respondents.

Data collection occurs over an eight-week long period beginning on the 15th of the second month of each quarter.

The electronic questionnaire "Architectural, Engineering, Surveying and Mapping Services Price Report" is used to survey five of eight industries which collectively account for approximately 85% revenue coverage of the North American Industry Classification (NAICS) 5413 industry group.

Prior to sending the electronic questionnaire, Statistics Canada undertakes an initialization process to identify the most suitable new survey participant (respondent), who typically is a project manager, engineer, architect or an estimation expert capable of providing fee or price estimates.

Following sample selection, new respondents are introduced to the survey through telephone calls. During this initial phase of data collection, respondents are guided through the process of selecting a representative project for which their company provides architectural, engineering or surveying and mapping services. The project's services and incidentals are then used as a model for which prices and their characteristics (specifications) will be monitored.

During the collection process, an email invitation is sent to the respondent inviting them to log in and complete the questionnaire. Subsequent contacts with the respondent take place when questionnaires are late or the responses provided require clarification. In the case of late respondents, several follow-up contacts can be made including sending out a reminder email in order to obtain a response.

View the Questionnaire(s) and reporting guide(s) .

Error detection

A set of systematized error detection procedures are in place to identify outliers and possible reporting errors. Records that fail processing edits are reviewed and corrected when necessary or edit failure may trigger a follow-up with the respondent. For example, the respondent will be contacted to verify a larger than average increase or decrease in the price of a contract.

A multiple choice check box is also provided to the respondents on the questionnaire to indicate any reasons for price change or lack thereof, and respondents are encouraged to elaborate in a comment section of the questionnaire. The reasons for change are reviewed for consistency with the data and later quantified and analyzed.

Time and effort is devoted to keeping the specifications constant such that only the pure changes in price are tracked. Some information is also collected in order to ensure, as much as possible, that the collected data correspond to the same specifications over time. This constant quality price then feeds into the Canadian System of Macroeconomic Accounts (CSMA) estimates of constant dollar Gross Domestic Product (GDP).

Imputation

For the preliminary data, estimates are imputed for respondents who were unable to respond on time or who provided unreliable reported values, while late responses are incorporated in the revised index (in subsequent releases). Imputation is automatically carried out during estimation; group averages by sub-industry and region are calculated from the available records to be used for imputation purposes.

Estimation

The prices collected for the AESPI represent the estimated prices that the business would charge if it were to bid again on the selected contract during the current reporting period (i.e. the current quarter).

Estimates are produced by calculating a weighted average of price relatives by industry which are chained together to form an index series.

The weights are established on the basis of information obtained from Statistics Canada's Business Register Division.

Index estimates are produced by calculating a weighted average of price relatives by industry, which are chained together to form an index series.

With the introduction of a new basket, historical estimates are linked to the new basket by maintaining the same historical quarterly changes. This is done by calculating a link factor for each index series as the ratio of the new basket index series (2018=100) in the overlap period to the historical index series (2013=100). This link factor is applied to the historical index series to bring it up or down to the level of the new index.

The overlap period for AESPI is currently the first quarter of 2018.

Quality evaluation

An in-depth assessment of quality is conducted prior to the dissemination of estimates. This assessment is based on two key elements of quality (accuracy and coherence), as defined in Statistics Canada's guidelines for the validation of statistical outputs.

The survey's data collection strategy is designed to ensure that targeted response rates are met every cycle. Analysts pay close attention to this metric and take the appropriate measures to ensure that the survey's coverage is thorough. Particular attention is also given to ensuring that sampled services are representative of actual transactions taking place in the market. These two activities, fundamental to the overall quality of the estimates, are done consistently.

Analysts also undertake additional validation activities every cycle to ensure the coherence of survey estimates. These activities include the analysis of price changes period-over-period and the analysis of trends at the business/company, industry, subsector and sector levels, the certification of key contributors to price change as well as the confrontation of estimates against other related data sources. Contextual analysis of survey results is also performed in light of prevailing economic conditions.

Engagements with relevant stakeholders are also undertaken periodically. Forums involving other Statistics Canada analysts, industry stakeholders and partners at other national and international statistical agencies provide valuable insight into the development and research agenda of the program.

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. 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 a price index and data are released as such, so that it is not possible to identify the suppliers of the original raw price information.

Revisions and seasonal adjustment

The data are not seasonally adjusted. There will be one revision period, plus an annual revision released with second quarter data of the following reference year.

Data accuracy

The statistical accuracy of this index depends on price and weight data. Price data are obtained from a sample survey and weights are obtained from Statistics Canada's Business Register, and both sources are therefore subject to their own errors.

The quality of the price data depends largely on the response rate and degree of imputation for the survey, and in this regard the quality of the price information is judged to be high, with a response rate of about 70% and degree of imputation is minimal.

Though the AESPI uses a sample survey methodology to obtain the necessary information, confidence intervals are not currently estimated, due to the longitudinal nature of price index series. Indexes are released only for levels of aggregation that are considered statistically reliable.

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