Architectural, Engineering and Related Services Price Index (AESPI)

Detailed information for third quarter 2013

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 - January 9, 2015

Description

The Architectural, Engineering and Related Services Price Index (AESPI) is a longitudinal quarterly survey that collects information on the prices of architectural, engineering, 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 indexes are used by the Canadian System of National Accounts to arrive at estimates of real value-added 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 GDP and changes in productivity.

Reference period: The time period for which the AESPI equals 100; currently this is the year 2013.

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

Subjects

  • Business, consumer and property services
  • Prices and price indexes
  • Professional, scientific and technical services
  • Service price indexes

Data sources and methodology

Target population

The target population for the AESPI is establishments belonging to one of the five NAICS industries listed below. All of these 6-digit industries are part of NAICS 5413 - Architectural, Engineering and Related Services.

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

The observed population for the AESPI differs from the target population due to the exclusion of the smallest (by revenue) establishments in the five in-scope NAICS industries. Within this subset of NAICS 5413, businesses comprising the bottom 10-percentile of the revenue of their industries are excluded from the survey. This exclusion is done in an effort to reduce response burden on smaller firms.

Instrument design

The questionnaire used for the AESPI was developed and tested after extensive research on industry pricing mechanisms and fee setting guidelines published by various associations and accreditation bodies. Focus-group testing of the questionnaire was performed by Statistics Canada's Questionnaire Design Resource Center in Ottawa, Montreal and Calgary in the spring of 2012. The survey was presented in winter 2012 to Statistics Canada's Business Response Management Committee, with the purpose of assessing the survey's burden on smaller businesses.

Sampling

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

The active sample size is approximately 600 establishments. The current sample was drawn from those establishments comprising the target population as of May 2012. The probability of an establishment being selected into the sample is proportional to its revenue.

Data sources

Responding to this survey is mandatory.

Data are collected directly from survey respondents.

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

The mail-out/mail-back 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 mail out, Statistics Canada undertakes an initialization process to identify the most suitable respondent, who typically is a project manager, engineer, architect or an estimation expert capable of providing fee or price estimates. When the respondent completes the questionnaire for the first time, he/she selects a contract that the business has completed in the recent past. The respondent also reports certain characteristics of the contract as well as its pricing information. During subsequent quarters, the respondent estimates the price that the business would charge if it were to provide the selected contract to the same client, during the current reporting period. In other words, the respondent is to report the prices that would apply if the company were to bid again on the selected contract during the current reporting period (i.e. the current quarter).

During the collection process, interviewers contact the respondents by phone to indicate that a questionnaire will be mailed. 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 letter 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.

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 and from annual industry turnover data gathered by Statistics Canada's Service Industries Division.

Quality evaluation

The data quality is evaluated repeatedly throughout the collection process using market intelligence and financial statements of publicly traded companies. Final estimates are evaluated in repeated data confrontations with other survey data tables and charts for example: capital expenditures, industrial capacity utilization, building permits, labour rates, foreign exchange rates, industry activity surveys, other price indices and commodity prices.

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.

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.

With each release of data, the previous quarter's data is subject to revision. These revisions occur when late data is collected for a previously non-responding establishment. Data that was excluded from the previous quarter's estimation as unsuitable can be re-integrated once it has been confirmed or corrected with the respondent.

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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