Division Producer prices or costs of new residential buildings

Producer price indices for construction measure only the development of new residential buildings and exclude residences for communities, non-residential buildings, land prices and architect’s and other fees. They reflect the prices paid by the client to the construction company. They therefore do not only reflect the variations in the cost factors of construction, but also the changes in productivity and profit margins. In addition, a temporal difference exists between the output price and the corresponding costs of production. The total construction costs of new residential buildings can be used as a proxy for the producer prices.

It is the objective of the total construction cost index to show the development of costs incurred by the contractor to carry out the construction process.

Costs that constitute the total construction costs of new residential buildings are material costs, labour costs, plant and equipment, transport, energy and other costs. Costs of residences for communities, non-residential buildings, land prices and architect’s and other fees are not parts of the construction costs.

The material costs are generally calculated using material prices. Prices of materials should be based on actual prices rather than list prices. Prices should be based on a sample of products and suppliers. Prices are valued excluding VAT.

The labour costs should cover wages and salaries and social security charges for all persons employed. Social security charges include: i) statutory social contributions payable by the employer, ii) collectively agreed, contractual and voluntary social contributions payable by the employer and iii) imputed social contributions (social benefits paid directly by the employer).

A new residential building is any building which is constructed for permanent or temporary residential use or a building which is converted from other use to a permanent or temporary residential use, and for which a building or planning permit is required in national legislation.