Statistical processing

Source data

The data used in Construction cost indices for civil engineering projects are mostly obtained from other statistics produced by Statistics Denmark.

Prices of materials and equipment are collected from the Price Index for Domestic Supply, which gathers prices from producers and importers on a monthly basis. For more information see the documentation of statistics for Producer and Import Price Index for Commodities. Prices of transportation are collected quarterly from the Producer price index for services, from which prices of Freight transport by road and removal services are used.

Up to April 2004 material and equipment costs were calculated on the basis of actual prices paid by producers/ importers excl. VAT. This means that the prices used were net of discounts of the actual sale of the materials or equipment. As of April 2004, the prices collected are the importers' purchasing price c.i.f. (i.e. including cost, insurance and freight) excl. taxes and fees, instead of the final sales prices that were collected previously.

Labor costs are calculated based on the collective agreements between the Danish Association of Builders (Dansk Byggeri) and the United Federation of Workers in Denmark (3F), as include wage rates and social costs.

All indices in the Construction cost indices for civil engineering projects are calculated for both with and without unemployment benefits.

The basis for the weights for earth work, asphalt work, concrete structures, and iron structures were developed in cooperation with the Danish Road Directorate, DSB and the Danish Construction Federation in 1976 based on an analysis of a ongoing and completed civil engineering project. The weights reflect the shares of labor costs, material costs and equipment costs of the total costs of performing civil-engineering projects. The weight basis is reevaluated approximately every 5 years, lastly in 2015, where the original weight basis was found to still be adequate.

The weighting scheme for the cost index for road construction is set up in cooperation with the Danish Road Directorate on the basis of an analysis of a range of finished road constructions. The indices for earth works, asphalt works and concrete structures are used directly in the calculation of the cost index for roads. The three indices have weights of 38 pct. for earth works, 41,5 pct. for asphalt works and 20,5 pct. for concrete structures.

Frequency of data collection

Primarily quarterly. In regards to product prices from the Price index for Domestic Supply, prices from the middle of the last month in the quarter are used as representation for the whole quarter. Some costs are gathered yearly, or in connecting with newly negotiated working agreements.

Data collection

For the Construction cost indices for civil engineering projects data that has already been gathered by other in Statistics Denmark is used. Products prices from the Price Index for Domestic Supply are reported digitally by select companies via http://www.Virk.dk. Furthermore, some prices are collected from the internet. Wage rates are gathered from collective agreements between the Danish Association of Builders (Dansk Byggeri) and the United Federation of Workers in Denmark (3F).

Data validation

Basic data is validated before use in the Construction cost index for civil engineering projects. Price developments are tested for unusual and/or extreme changes. Prices that do not pass fixed threshold values will be checked manually by the staff and accepted only if the companies can verify the change.

When all prices are received, the system generates a list that includes all price changes and a measure of how these affects the elementary aggregates. The last validation is a visual inspection of all index tables.

Data compilation

The cost index for civil engineering projects is calculated following a hierarchical system where the collected prices are distributed into a number of product groups. These product groups are aggregated to "basic aggregate groups", which are used to calculate "basic prices". The developments between basic prices in subsequent time periods are used to calculate "basic indices", which is the most detailed index level. The basic indices are then used to calculate aggregated sub-indices using the Laspeyres type index formula. Finally, sub-indices are used to calculate main indices, which are the highest level in the index hierarchy.

For all indices, sub-indices for labor costs and a number of main cost groups are calculated. These sub-indices are weighed together to form the main indices. The process of weighing from individual prices through main indices is based on so-called classification codes and separate weights for each index type.

Main cost indices include Roads, Earth work, Asphalt work, Concrete structures, Iron structures, and Operating index. Sub-indices for Materials and machinery, and Traffic performance by lorries are also compiled.

Adjustment

Substitution of the products used in calculation of the index may occur over time. Because such new products may be of a different quality than the previous, continuous quality control of is performed.

No other data corrections are carried out, except for the methods described in the sections for Data validation and Data compilation.