Construction cost index for road construction

Updated: 23 January 2023

Next update: 21 April 2023

Change in road construction costs from the same quarter the previous year
Change in road construction costs from the same quarter the previous year
4th quarter 2021 - 4th quarter 2022
12.3
%

About the statistics

The construction cost index measures the quarterly costs of road construction and maintenance of roads. The cost indices are not affected by changes in productivity or changes in profit margins. The indices are used primarily to regulate construction contracts.

The construction cost index for roads and the cost index for maintenance of roads measure the changes in the prices of input factors to the construction and maintenance of roads. CCI ignores gains in productivity and changes in profit margins.

Labour cost is divided into two main components, which are calculated separately: wages and salaries for actual worked hours, and other labour costs. Other labour costs include wages and salaries for hours not worked and social security charges.

A Laspeyres price index is a price index where the weights remain fixed. A chained Laspeyres price index is an index linked by Laspeyres indices with different sets of weights.

Price: Actual sales prices to the construction industry. Price on the 15th of the mid-month in the quarter exclusive VAT.

Name: Construction cost index for road construction

Topic: Prices and price indices

21 April 2023

Division for Housing, Property, Spatial and Agricultural Statistics

National level only

Quarterly

Not relevant

Quarterly price observations for goods and services are stored on UNIX.

The construction cost index measures changes in input prices for road constructions.

The cost indices ignore gains in productivity and changes in profit margins. Statistics Norway has published construction cost indices for civil engineering works since 1985. The weights were renewed in 2004. At the same time the former construction cost index for water plant was discontinued. The types of construction covered are open air road, concrete bridge and rock tunnel.

The indices are used to regulate the costs of construction works. The construction cost indices are used as deflator in the National Accounts.

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Not relevant

Act of Offical Statistics and Statistics Norway (Statistics Act) from 2019-06-21 § 10, decision on the duty to provide information and § 20, compulsory fines

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Construction cost indices measures the price developments of material, labour, transport, plant and other types of input factors in civil engineering works, i.e. costs incurred by the contractor/producer carrying out the construction work.

To calculate the index, two types of information are collected about the input factors: the weight of each component and their prices. The weights are compiled every fifteenth year through cost studies of civil engineering works. The prices are measured quarterly.

The labour costs follow a custom made index of labour costs for the construction cost indices for road construction and the maintenance of roads. This index is entered into the CCI with a lag of one quarter.

Price data of materials are obtained from the following price indices in Statistics Norway:

  • Construction cost index for residential buildings
  • Consumer price index
  • Producer price index

Machinery costs indices calculated by NTNU

Transport costs indices compiled by Statistics Norway.

In addition some material, service and machinery prices are obtained exclusively for this statistics by means of questionnaires.

Some material, service and machinery prices are collected quarterly by means of questionnaires.

The prices are put through tests, which identify observations with large price changes from the previous quarter. Prices are also checked when sorted by item and when items are aggregated into groups. Sub-indices and item-indices are checked against time-series that are published earlier and comparisons with other statistics.

The construction cost index is calculated as a Laspeyre Index with fixed weights. The fixed weights are derived from project data collected from tenders and calculations, and accounting data from highway authorities.

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There is a break in the time series in the first quarter of 2004, due to the implementation of new weights.

The outlets might, for the sake of convenience, copy the previous month's prices instead of the correct prices when filling out the questionnaires. The most obvious cases of this kind are revealed in a manual check carried out when receiving the questionnaires. When a product or service is no longer sold, the outlets are instructed to find a replacement and mark it in the questionnaire. If they fail to do so, the difference in price between the old product and the replacement will incorrectly be registered as a price change of the old product.

For some goods price measurements are based on price lists, and changes in discounts given to building contractors are not taken into account. Other errors:

Price effects due to changes in relative prices, or the price ratio between different goods and services has been changed over time. Unsatisfactory handling of quality changes.

Statistics Norway has not initiated separate calculations of the impact of these measuring errors in the building cost indices.

Each month about 1 per cent off all questionnaires is missing. Missing prices are imputed. The imputations are based on the average changes in prices from the previous month of the same product.

Sampling errors are not calculated.

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Contact

Martin Handeland Skjæveland

martin.skjaeveland@ssb.no

(+47) 40 81 14 17