Statistical presentation

Data description

The construction cost index for residential buildings is a quarterly index delineated by labor costs, material costs and equipment costs for a typical residential building in Denmark. The published indices reflect costs in comparison to a reference period (2015), and therefore do not illuminate the actual cost levels. The index is delineated for a one-family house and a multi-family house, in addition to an index for the total. The index is further delineated into seven sub-indices by profession and six sub-indices by building parts as well as material costs and labor costs.

The index encompasses costs incurred when raising a residential building, i.e. costs of labor, equipment and materials for the entrepreneur. However, costs associated with the plot, architect, etc. are not included the computation of the construction cost index.

The index shows a quarterly change in construction costs for residential buildings and is calculated on the basis of a fixed basket of commodities. Thus, the construction costs are associated with the same type of residential building. The composition of the index is based on an analysis of actual constructions of residential buildings, using information obtained primarily from the Dwelling- and Housing Register (BBR).

The weights used in the construction cost index for residential buildings are based on business accounts from three actual residential buildings: a one-family house, a terraced house and a multi-family house. The business accounts are collected from three entrepreneurs of different sizes and geographic location. During the processing of this data, an engineer specialized in pricing of residential buildings has been consulted. The collected information is processed so that each construction part, e.g., the mounting of a concrete wall element, is specified by materials, in this case concrete, by equipment, e.g., building crane, and by type of labor, e.g., concrete element work, that is required, and the associated costs.

Approximately every fifth year the three types of residential buildings are assessed on the basis of their relevance as representing the typical residential building in question. The weights were last updated as of the 1st quarter 2016 where both the weighting- and reference periods were changed to 2015.

Labor costs cover wages and salaries, in addition to other social benefits covered by the employer. In the construction cost index for residential buildings, labor costs cover the compensation of employees that constitute the total earnings of employees. The total earnings includes the employee's wages and salaries paid by the employer including pension contributions by the employee and the employer to the employee. The remaining parts of the labor costs include those costs associated with the employee-employer relation, which does not have the character of direct earnings for the employee, i.e. social contributions from public funds, education costs, voluntary personnel costs, etc.

Material costs cover all costs from materials and equipment. Up to April 2004 material and equipment costs were calculated on the basis of actual prices paid by producers/ importers excl. VAT. This means that the prices used were net of discounts of the actual sale of the materials or equipment. As of April 2004, the prices collected are the importers' purchasing price c.i.f. (i.e. including cost, insurance and freight) excl. taxes and fees, instead of the final sales prices that were collected previously.

The division into building parts is based on the Danish classification of building elements; SfB Bygningsdeltavlen.

The division into profession components is based on the different costs associated with the respective building trades.

Costs associated with organization and operation of construction sites have been distributed equally between the different profession components and building parts.

Classification system

The construction cost index for residential buildings can be grouped by housing types, professions, building parts, fixtures, as well as material and labor costs.

The index can be subdivided by housing types: one-family houses; multi-family houses; residential buildings in total (one-family houses and multi-family houses).

The index can be subdivided by professions:

• Earth and concrete work
• Concrete slab work
• Bricklaying
• Carpentry and joinery (in indices from prior to 2015, this profession is divided into separate professions Carpentry and Joinery)
• Painting
• Heating and sanitary engineering
• Electrical work

The division of professions are based on the relevant profession that are included in the labor costs and are classified by DISCO-08. The industries that information are collected from are determined by the industry code DB07.

The index can be subdivided by building parts:

• Subgrade
• Raw buildings
• Completion of buildings
• Surfaces
• Heating and sanitary installations
• Electrical and mechanical installations

Labor costs and material costs are not subdivided further.

Sector coverage

The construction sector.

Statistical concepts and definitions

Labor Costs: The price concept of labor costs is the actual earnings plus other labor costs, including employers' payments of social contributions. Only the labor costs of persons directly involved in the construction process are included.

Building part index: The indices for one-family house, multi-family house, and residential buildings in general are divided into subindices for professions and building parts. Each are further divided into materials and labor costs. The following building parts indices are included:

• Subgrade
• Raw buildings
• Completion of buildings
• Surfaces
• Heating and sanitary installations
• Electrical and mechanical installations

Costs associated with organization and operation of construction sites have been distributed equally between the different profession components and building parts.

Profession index: The indices for one-family house, multi-family house, and residential buildings in general are divided into subindices for professions and building parts. Each are further divided into materials and labor costs. The following profession indices are included:

• Earth and concrete work
• Concrete slab work
• Bricklaying
• Carpentry and joinery (in indices from prior to 2015, this profession is divided into separate professions Carpentry and Joinery)
• Painting
• Heating and sanitary engineering
• Electrical work

Costs associated with organization and operation of construction sites have been distributed equally between the different profession components and building parts.

Material prices: The concept of material prices for imported commodities is actual transaction prices c.i.f. excluding all duties and taxes on the goods. For commodities for the home market the concept of material prices is actual transaction prices ex producer, excluding VAT and excise duties, and taking both general and specific discounts into consideration.

Weights: Weighing of different cost units in the construction cost index is based on accounting data from three actual building constructions: One one-family house, One semi-detached house, One multifamily house. The buildings were chosen as representation of typical housing constructions on the basis of an analysis of actual housing constructions during the weight reference period.

The data for the three types of buildings are obtained from contractors of different size and geographic location. A consulting contractor specialized in pricing of housing construction was involved in the processing of the data.

Statistical unit

Costs.

Statistical population

The indices represent the construction of residential buildings in all of Denmark.

Reference area

Denmark.

Time coverage

2003-

Base period

2015=100.

Unit of measure

Index values and percentage change.

Reference period

The construction cost index for residential buildings is compiled quarterly, i.e. the relevant index number is representative for average costs in the relevant quarter.

Frequency of dissemination

Quarterly.

Legal acts and other agreements

The legal authority for data collection is provided by section 8, paragraph 1 of the Act on Statistics Denmark, cf. Executive Order no. 610 of 30 May 2018.

The Construction Cost Index for Residential Buildings is transmitted to Eurostat on a quarterly basis in accordance with EU Council regulations (EC) 1165/98 of May 19th. 1998 about business cycle statistics and the Commission Regulation (EC) No 588/2001 of May 26th, 2001. Subsequently, there have been various regulations that have further introduced new aspects, which are now being merged and replaced by Regulation (EU) 2019/2152 of the European Parliament and of the Council of 27 November 2019.

Cost and burden

There is a miniscule direct response burden since the majority of the data used in production are obtained from other statistics in Statistics Denmark.

For information about how the prices used in the Construction cost index for residential buildings are reported, users are referred to the documentations of statistics for Producer and Import Price Index for Commodities and Producer Price Index for Services.

Comment

Further information on the Construction cost index for residential buildings can be found on the subject page or can be obtained by contacting Statistics Denmark, Prices and Consumption.