Background Notes

Production in Building & Construction Index

The quarterly production in building and construction index provides quarterly statistics on output in the sector. The index monitors trends in the value and the volume of production in building and construction. The primary purpose of the index is to measure changes in value added at constant prices.

The principal difference between the value and volume indices is that the volume index traces the quantitative volume of production (i.e. effect of price changes excluded) each quarter. The Capital Goods price index for Building and Construction was used as the price deflator for this series.

This series is also available using the interactive tables in the CSO’s Database Direct on www.cso.ie 

Reference Periods

The production in building and construction index is carried out on a quarterly basis (i.e. the first quarter covers January, February and March etc.).

Base Year

The set of indices, based on the Laspeyres Index, has been compiled with reference to base year 2005 = 100. The underlying structural weighting system is based on annual output in the Building and Construction sector as published in the DKM Economic Consultants Review of the Construction Industry for the year 2007, which presents annual output for reference year 2005.

Legal Basis

The Quarterly Survey of Construction (QSC) is carried out in accordance with the Statistics (Quarterly Survey of Construction) Order 2009, Number 73 made under the 1993 Statistics Act. The statistics are also required for EU comparisons under Council Regulation (EC) No. 1165/98 which has been amended by Regulation (EC) No. 1893/2006 with the introduction of NACE Rev. 2.

Scope and Coverage

The production in building and construction index covers, on a sample basis, the production of all firms in the private (i.e. non-State) sector whose main activity is building, construction or civil engineering i.e. firms classified to division F of the Statistical Classification of Economic Activities in the European Community (NACE Rev. 2). Approximately 2,000 firms are surveyed each quarter.

Seasonal Adjustment

Seasonal Adjustment is conducted using the direct seasonal adjustment approach. Under this approach, each individual series is independently adjusted. Each individual seasonally adjusted series is calculated based on working day adjusted data.

The adjustments are completed by applying the X-12-ARIMA model, developed by the U.S. Census Bureau to the working day adjusted data. This methodology estimates seasonal factors while also taking into consideration factors that impact on the quality of the seasonal adjustment such as outliers and level shifts in the series.

For additional information on the use of X-12-Arima see (Findley, D.F., B.C. Monsell, W.R. Bell, M.C Otto, and B. Chen (1998), “New Capabilities and Methods of the X-12-Arima Seasonal Adjustment Program”, Journal of Business & Economic Statistics, 16, pp. 127-177.) and www.census.gov/srd/www/x12a/ .

Methodology

A detailed description of the methodology is available within the Surveys and Methodology areaon the CSO website at: 

http://www.cso.ie/en/surveysandmethodology/construction/quarterlyconstruction/

Comparison with other national series

There are differences (due to timing, definitions and other factors) between the quarterly and annual trends measured by this survey and by other national data sources. In particular the quarterly series from the QSC show considerable volatility. Table A, below, compares the main annual results of the survey with national employment and house building indicators. 

The series shows a decrease of 7.2% in the annual volume of production in building and construction, between 2011 and 2012. In the same period, employment in the sector, as measured by the QNHS, fell by 6.4%. 

For residential buildings, the QSC shows a decrease of 18.5% in the annual volume of production between 2011 and 2012, whereas the house completions series shows a decrease of 19.0%.

Data on house-building commencements, a relatively new leading indicator, are also included in Table A.  This indicator shows a decrease of 7.4% in residential building in 2012 when compared with 2011.

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