Base shift for input price indices Civil engineering from 2010=100 to 2015=100

3. Summary of changes

The base of a price index is changed every five years. This is because over the years the production ratios shift, and hence so do the ratios between and within the different parts of civil engineering. To ensure that a price index accurately reflects the current price developments, the weights are regularly adjusted in line with the more recent production ratios. This is the main purpose of the base shift. The changes made in the base shift of the price indices for civil engineering are detailed below.

3.1 Expansion of series 4212 Railways

As described in section 1, with effect from this base shift the number of distinct areas has been increased from eight to ten. The new series are:

3.1.1 4212a Railways; New construction

This new series concerns the construction of heavy rail, i.e. the construction of new rail infrastructure. The work includes rail and track construction, traction and energy supply, security and structural works. It does not include transfer points/stations and ICT.

3.1.2 4212b Railways; Exploitation/maintenance

This new series concerns the exploitation and maintenance of heavy rail. It covers the exploitation, management, maintenance and replacement of existing rail infrastructure, including transfer points/stations and ICT.

3.2 New weightings

At the time of the base shift to 2010=100 it was decided that the existing models of the civil engineering areas were still sufficiently representative to be used for the new base. For the base shift to 2015=100 that is now taking place, it was decided that for all areas new representative projects would be selected that are more in line with current market developments in terms of materials use and execution.
This means that all source data – such as the budgets of the different areas of civil engineering – have been redefined in order to determine the weights.
We use weighting schemes on three levels to calculate the civil engineering price indices. First of all, the price indices of the labour, materials and equipment cost items are weighted together to create a single price index for a particular type of work in an area of civil engineering. Then the various types of work are weighted together into one of the published areas of civil engineering. Finally, the price indices of the areas of civil engineering are weighted together to create a single price index for civil engineering as a whole.

3.2.1 Weighting schemes for cost items within a type of work

To determine the new weights, the costs of all materials, equipment, services and labour within a type of work are linked to a series of price indices representing the price or cost movements of the cost item concerned. For the price movements of the different cost items we use the producer price indices (PPI) 2015=100, service price indices (SPI), consumer price indices (CPI) and finally the collectively agreed wage index series for contractual wage costs per hour worked, including special remuneration.

3.2.2 Weighting schemes for types of work within an area of civil engineering

First of all the weights of the different cost items are determined. These are based on the costs included in the budget for each cost item. After the weights of the individual cost items have been calculated, the weights of the different types of work within the areas are determined. This weight is equal to the sum of the weights (costs) of all cost items within the work type. In this way, the proportion of each type of work within an area of civil engineering is calculated.

3.2.3 Weighting scheme for areas of civil engineering within civil engineering as a whole

In order to arrive at a price index for civil engineering as a whole, the price indices for each area are then weighted together on the basis of data from the National Accounts (NA). These data also include sales data for each area. These are used to determine the proportion of each area in the total sales of the civil engineering sector. Currently, the most recent NA data are from 2016. Because the price level of the cost items was set at 2018, the NA sales data have also been raised to the 2018 price level using the civil engineering price indices.

3.3 Input data

With effect from this base shift, service and consumer price indices are being used as well as producer price indices. An example is the price index for road transport. Due to the use of these price indices, the course may differ from that of the previously used producer price indices. The use of more differentiated wage indices may also give rise to a difference as compared to the previous exclusive use of wage indices for the construction sector.