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

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.

4.1 42/43 Civil engineering

In addition to the series for the individual areas, a price index for the entire civil engineering sector is also published. This series is made up of the component series, with the weighting scheme being based on the most recent data from the 2016 National Accounts with a price adjustment to 2018.

Table 1 above summarises this weighting scheme. Many of the shifts in weights are caused by a revision carried out by the NA. Because the weights always add up to 100, these adjustments also affect the other weights.

The series 4212a Railways; New construction and 4212b Railways; Exploitation/maintenance have a weight of 0 (zero) in the calculation of 42/43 Civil engineering as a whole. This is to prevent double counting, because they are already part of 4212 Railways and underground railways, which does make up part of the total.

In table 1 the share of labour, materials and equipment in the total figure for ‘42/43 Civil engineering’ has also been added for information. These shares are a weighted total of the breakdown between labour, materials and equipment for each area.

The above changes made in the base shift have the result that the new 2015=100 series shows a different course than the old series. Both at the beginning (in 2012) and at the end (in 2019), the 2015=100 line is slightly higher than that of 2010=100. On closer inspection this is found to have been caused in the period around the 2015 reference year. If we rescale both series to 2012=100, we can see that the difference in the development of the two series occurs mainly in the period 2015-2017. It is principally due to the series ‘Road construction; asphalt paving’ (see chart 4.2.2). With effect from this base shift a new price index for roadbuilding asphalt has been used for this series. See section 4.2.

4.2 Areas

Below are the charts showing the course of the series based on 2010=100 and 2015=100 for the various areas.

The series 4211a, Road construction; brick paving based on 2010=100 and 2015=100 mainly show a similar development. The minor differences are due to the change in the weighting scheme as a result of the new, updated model used in the 2015=100 series.

The two 4211b, Road construction; asphalt paving series show a very different development. This is mainly due to the use of a new series for price movements of roadbuilding asphalt.

PRODCOM 23991300, Bituminous mixtures based on natural and artificial stone materials and bitumen, natural asphalt or related substances as a binder was used in the 2010=100 series. At a certain time CBS received indications from users in ‘the field’ that the development of this index did not reflect their actual experience. Further investigations led to the conclusion that the group of materials in the PRODCOM concerned were not sufficiently homogeneous for use in the Road construction; asphalt paving series. This led to the creation of a new series with a more homogeneous composition that is now used in Road construction; asphalt paving.

The two 4212 Railways and underground railways series based on 2010=100 and 2015=100 show a similar trend over the long term. Minor differences have arisen due to the choice of new models and the associated new weighting schemes.

The new model in the series 4213, Bridges and tunnels gives rise to no major differences between the series based on 2010=100 and 2015=100.

The use of new models and the associated new weights of the different materials and labour gives rise to a difference between the series 4221 Constructions for fluids 2010=100 and 2015=100. The underlying cause is that concrete sewer pipes in the new model have been given a heavier weighting and their prices have risen by above-average amounts. The price movements in the new series are consequently greater than in the old series.

The series 4291, Constructions and construction works for water projects also shows only slight differences between the 2010=100 and 2015=100 series, which can be traced back to the new model and the weighting scheme.

The new 2015=100 series for 4312, Site preparation works has price movements both at the beginning of 2012 and in mid-2018 that differ from those in the old 2010=100 series. This is due to the choice of the proxy used for movements in the price of filling sand.

In area 4321, Electrical installation works the Road signage work type in the 2015=100 series represents an important (or more important) component. PRODCOM 26200000, Manufacture of computers and peripheral equipment was chosen as a proxy for the electrical components in this series. This shows smaller price movements than the previously used residual PRODCOM group 279x, Manufacture of other electrical equipment. This is the main reason for the movements in the new 2015=100 series.

The tables for the 2010=100 series were discontinued on the publication of the January 2020 figures for the new 2015=100 series. Up-to-date figures can be found in the 2015=100 series.
For civil engineering as a whole and the individual areas, the new 2015=100 series can be linked to the old 2010=100 series if required. A recommendation is provided below on the method for switching from the old to the new series. If you wish to use the results of the civil engineering price indices for indexation, you have a number of options:

• The calculation of a price development over a period starting in or after January 2008 and ending in October 2019 at the latest is based on the 2010=100 series.
• The calculation of a price development over a period starting in or after January 2012 and ending after October 2019 is based on the 2015=100 series.

• The calculation of a price development over a period starting between January 2008 and the end of October 2011 and ending after October 2019 is based on an index-linked 2010=100 series. From January 2020, in the 2015=100 series, the percentage development relative to October 2018 must be calculated, because the price index for October 2018 was the last final figure published on the 2010=100 basis; thereafter this development must be ‘switched to’ the October 2018 results of the 2010=100 series (see table 2).
  
  

  2. Linking example

  Period	Index 2010=100	Index 2015=100	Index linked series
  October 2018	114.5	112.1	114.5
  January 2020		114.2	116.6

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  The January index of the linked series is established by determining the development between October 2018 and January 2020 according to the 2015=100 series and multiplying it by the October 2018 index from the 2010=100 series. In the example: (114.2/112.1) * 114.5 = 116.6 (rounded). For April 2020 the index is calculated according to the same line, in each case with a link in October 2018.

These linking recommendations are based on two principles: (1) the price developments are calculated as far as possible within a single published series and (2) retroactive adjustments and corrections must be avoided as far as possible.
In addition to the series with different base years describing a limited period, CBS also publishes a historical 2000=100 series, from 1979. In this historical series, the series are linked together from the first publication period.
If you have any questions or difficulties, please contact the CBS information service.