U.S. Bureau of Labor Statistics

Transcription

1 U.S. Bureau of Labor Statistics PPI Nonresidential Building Construction Initiative Frank Congelio

2 Background Initiative begun in 2001 & completed in 2008 Goal: Develop output price indexes for the nonresidential building construction sector Catalysts: Expanding PPI coverage of the Catalysts: Expanding PPI coverage of the U.S. Economy & Need for improved GDP deflators

3 PPIs for Nonresidential Construction ti BLS has developed and publishes eight PPIs measuring national-average changes in output prices for nonresidential building construction Four PPIs measuring changes in new construction ction output t prices for specific structure types Four PPIs measuring changes in output prices for work performed by specific specialty trades

4 PPIs and Release Dates PPI Titles and Codes Public Release New Warehouse Building Construction (236221) July 2005 New School Building Construction (236222) July 2006 New Office Building Construction (236223) January 2007 New Manufacturing and Industrial Building January 2008 Construction (236211) Concrete Contractors (23811X) July 2008 Plumbing, Heating, and Air-Conditioning Contractors July 2008 (23822X) Roofing Contractors (23816X) July 2008 Electrical Contractors (23821X) July 2008

5 Building Index Methodology BLS uses building cost model-based pricing approach (See handout for example model.) BLS uses professional construction cost estimating firms to develop building cost models BLS uses multiple building models for distinct geographic regions (NE, S, W, and MW) to produce each building index BLS uses models based on actual buildings selected to represent typical construction for each structure type within each region

6 Building Index Methodology Each model consists of a series of building assemblies which represent a single job that would be the responsibility of a specific type of trade contractor Each assembly is further broken down into component lines which provide additional detail about the material, labor, and equipment inputs included in the assembly

7 Building Index Methodology BLS regional models use regional average material and installation costs from the cost estimating firm BLS directly collects Overhead & Profit data from building contractors BLS combines secondary-source source data with directly collected data to compute assembly output prices BLS d l d t i l d t f l d i iti BLS models do not include costs for land acquisition, permitting, architectural or engineering services, preor post-construction site preparation

8 Building Index Methodology Building contractor respondents provide updated OH&P percentage for installing selected assemblies each month Material and installation costs for all models are updated every three months Model specifications are updated as market practices dictate t with quality-adjustments t t Models are re-selected every five years

9 New Nonresidential Building Construction PPIs Index Value Dec-04 Feb-05 Apr-05 Jun-05 Aug-05 Oct-05 Dec-05 Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb Apr Jun Aug Oct Dec Feb-09 Apr-09 Jun-09 Warehouses Schools Offices Industrial

10 $25.00 $24.50 $24.00 $23.50 $23.00 $22.50 $22.00 $21.50 $21.00 $20.50 $20.00 Average Hourly Earnings of Production Workers-Nonresidential Building Construction Source: Bureau of Labor Statistics/Current Employment Statistics Dec-04 Feb-05 Apr-05 Jun-05 Aug-05 Oct-05 Dec-05 Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb Apr Jun Aug Oct Dec Feb-09 Apr-09 Jun-09

11 Normalized PPI Values for Selected Construction Related Materials Dec-04 Feb-05 Apr-05 Jun-05 Aug-05 Oct-05 Dec-05 Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb Apr Jun Aug Oct Dec Feb-09 Apr-09 Jun-09 PPI Inputs to Nonres Bldgs Ready-mix Concrete Lumber & Plyw ood Steel Mill Products Fabricated Structural Metal for Bldgs Synthetic Rubber (EPDM)

12 Normalized PPI Values for #2 Diesel Fuel Dec-04 Feb-05 Apr-05 Jun-05 Aug-05 Oct-05 Dec-05 Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb Apr Jun Aug Oct Dec Feb-09 Apr-09 Jun-09

13 OH&P Changes for New Nonresidential Building Construction Ju Au Se Oc No De Ja Fe Ma Ap Ma Ju Ju Au Se Oc No De Ja Fe Ma Ap Ma Ju Ju Au Se Oc No De Ja Fe Ma Ap Ma Ju Ju l-06 ug-06 ep-06 ct-06 ov-06 ec-06 n-07 b-07 ar-07 pr-07 ay-07 n-07 l-07 ug-07 ep-07 ct-07 ov-07 ec-07 n b ar pr ay n l ug ep ct ov ec n-09 b-09 ar-09 pr-09 ay-09 n-09 l-09 Increases Decreases

14 Specialty Trade Index Methodology BLS collects price data on maintenance and repair work directly from building contractor respondents in four specialty trades: concrete, roofing, electrical, and plumbing/hvac Maintenance and repair jobs priced are actual jobs performed by respondents-including service contracts Each of the four trade contractor PPIs is created by aggregating trade contractor-specific data previously gathered for the new building construction PPIs with the data separately collected for maintenance and repair work performed by the contractor trades

15 Specialty Trade PPIs e 105 Index Valu Concrete Roofing Electrical Plumbing/HVAC Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Date

16 Additional Information For an overview of the PPI NRBC Initiative and descriptions of methodologies:

17 Homeownership Prices in the CPI The CPI does not use an asset or acquisition approach to measure homeownership prices The CPI uses a rental equivalence approach to measure homeownership (shelter) prices In the CPI, Owners equivalent rent of primary residence (OER) is based on the estimated market rents for owner-occupied housing For more information:

18 Service Sector PPIs PPI for Rail Transportation, the first Service Sector PPI, was introduced in January 1985 Expansion continued through the mid-1990s with focus on the Transportation ti sector Mid-1990s to present continued expansion added PPIs for health care, real estate, professional services, administrative services, finance, insurance and wholesale & retail trade sectors PPI currently publishes measures for over 150 Service Sector industries, i covering 77% of Service Sector GDP