Non-Residential Building Construction Price Indexes (NRBCPI)
Detailed information for fourth quarter 2000
The Non-residential Building Construction Price Index (NRBCPI) is a quarterly series measuring the changes in contractors' selling prices of non-residential building construction (i.e. commercial, industrial and institutional).
Data release - February 9, 2001
The Non-residential Building Construction Price Index (NRBCPI) is a quarterly series measuring the changes in contractors' selling prices of non-residential building construction (i.e. commercial, industrial and institutional). 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 NRCBPI series are useful in many ways. They aid in the interpretation of current economic conditions and are of particular interest to government agencies undertaking economic analyses and users concerned about the impact of price changes on capital expenditures. As well, the series are employed by the Canadian System of National Accounts in arriving at estimates of real gross domestic product or output for the non-residential building construction sector through deflation. Other uses include, updating construction project costs through escalation, assessing company performance, restating the value of invested capital, forecasting financial requirements for proposed projects and calculating real rates of return on investment.
Reference period: The time period for which the NRBCPI 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.
- Construction price indexes
- Non-residential building construction
- Prices and price indexes
Data sources and methodology
The population for the NRBCPI consists of non-residential building construction general and trade contractors that are primarily engaged in the construction of non-residential buildings in the census metropolitan areas (CMA) of Halifax, Montréal, Toronto, Calgary, Edmonton, Vancouver and the Ontario part of the Ottawa-Gatineau CMA.
This is a sample survey with a longitudinal design.
Sample items of work-in-place to be priced were selected from five different actual buildings. Three of these buildings (office, warehouse and shopping centre) fall in the category of commercial building, one building (light factory) falls in the category of industrial building and the school falls in the category of institutional 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 each quarter in Montreal, Toronto and Vancouver for all models and for Ottawa, Halifax, Calgary and Edmonton prices were collected semi-annually from 1981 until 1988. Since 1989 prices are collected quarterly for all models in all seven cities. 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 each structure wherein quantities or values for each model were expressed in 1992 price levels. The office, light factory and school models used were derived from the specifications of structures built in the early 1990's while the warehouse and shopping centre models were derived from the specifications of structures built in the early 1980's.
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 non-residential 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.
Models of major trade activities are priced and weighted up to simulate whole structure price movement. Lesser trade activities are prorated.
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.
Confidence intervals are not calculated due to the nature of the survey. Trade total and aggregate level indices are felt to be statistical reliable.
The statistical accuracy of the NRBCP depends on price data and weight information. Price data are obtained from a subjective sample survey, while the weights come from actual cost breakdowns of constructing representative building models at a certain point in time. Both kinds of input data are subject therefore to their own errors. The quality of the weight data depends on the timeliness of the models considered. In general, the longer the models are kept, the less they reflect the current changes in input mix and construction technologies.
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 NRBCPI 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%.
- Non-Residential Building Construction Price Indexes - Data Quality Statements