Construction In SNA

1
Construction In SNA

• Concepts and Estimation

2
Topics

• Classification
• Construction economic activity
• Construction-related capital formation
• Estimation of Gross output and GVA of
  construction
• Estimation of Construction-related capital
  formation
• Data sources for estimation
• Weights in price index compilation

3
Classification of Construction

• Economic Activity (ISIC Rev 3.1)
• 45 Construction
• 451 Site preparation
• 452 Building of complete construction or parts
  thereof civil engineering
• 453 Building installation
• 454 Building completion
• 455 Renting of construction or demolition
  equipment with operator

4
Classification of Construction

• Economic Activity (Proposed ISIC Rev 4)
• 39 Construction of building
• 391 Construction of residential buildings
• 392 Construction of non-residential buildings
• 40 Civil engineering
• 401 Construction of roads and motorways
• 402 Construction of utility projects
• 403 Construction of other civil engineering
  products

5
Classification of Construction

• Economic Activity (Proposed ISIC Rev 4)
• 41 Special Trades
• 411 Site preparation
• 412 Building installation
• 413 Building completion
• 414 Other specialized trades
• 415 Renting of construction or demolition
  equipment with operator

6
Construction-related Economic Activity

• Economic Activity (ISIC Rev 3.1)
• 74 Other business activities
• 742 - Architectural, engineering and other
  technical activities
• 7421 - Architectural and engineering activities
  and related technical consultancy
• Economic Activity (Proposed ISIC Rev 4)
• 66 Architecture and engineering activities
  technical testing and and analysis
• 661 Architectural and engineering activies and
  related technical consultancy

7
SNA Classification of Construction-related
Capital Formation

• Land
• Cost of land improvement which is part of
  construction activity but not included in
  construction of building
• Dwelling, residential buildings
• all structure, permanent or movable used as
  dwelling, includes fixtures customarily installed
  in building and site clearance and preparation,
  exclude mobile dwelling units such as boathouses
  and caravans

8
SNA Classification of Construction-related
Capital Formation

• Other building and structures
• Non residential buildings also includes
  fixtures, equipment and facilities that are
  integral part of the structure, site clearance
  and preparation included in building construction
• Other structures roads, bridges, communication
  and power lines, pipelines, etc..

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Estimation of Output and Value Added of
Construction

• Gross Output Total value of the product of the
  construction and construction-related activity
• Intermediate input the value of product (goods
  and services produced) which are used in
  production
• Value added or primary input value or payment
  for the use of resources (human resources,
  produced and natural resources, financial
  resources, intangible assets) and taxes in
  production
• Value added constitute the income generated from
  production

10
Primary input/ value added/ income generated
Intermediate input
Intangible produced
Financial R
Produced fixed R
Value added
Natural R
government
Human R
Output
T-S
Sale
CFC
OS
Goods Services from Production
COMP
Change in inventory
OUTPUT goods and services
Own final use
Intermediate input
Production
Output
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Estimation of Output

• Direct estimation of Gross Output
• Quantity approach
• quantity of product producers price
• Cost approach
• intermediate input primary input or value
  added
• Disposition approach
• sale own use own final use

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Estimation of Output

• Indirect estimation of Gross Output
• Extrapolation
• Based on sample
• Based on input indicators
• Based on related variables building permits,
  budget for infrastructure
• Production parameters
• Input share production and net imports of
  construction materials and building fixture and
  equipment
• Technical parameters based on building permits
• Others

13
Estimation of Gross Value Added

• Direct estimation of gross value added
• Residual approach
• GVA Gross output- intermediate input
• Cost/income approach
• GVA compensation consumption of fixed
  capital taxes net of subsidies in production
  operating surplus(interest, rent of natural
  asset, gross profit)

14
Estimation of Gross Value Added

• Indirect estimation
• Using sample data on output and gross value added
  parameters
• GVA t GO t gvar
• Using sample data on gva
• GVA t GVA t-1 gvat/gva t-1
• Using related indicators
• GVA t GVA t-1 OI t/Oi t-1

gvar (GO-II)/GO
OI output indicator value of major input,
construction index
15
Estimation of Gross Value Added of Construction
at Constant Prices

• Double deflation
• GVA 0 t GO0t II 0t
• Using sample data on output and gross value added
  parameters at constant prices
• GVA 0t GO 0t gvar0
• Using quantity indicators
• GVA 0t GVA 0t-1 QIt/QI t-1
• Using Output price deflator
• GVA 0t GVA t /PI0t

QI quantity indicator employment, construction
materials, etc
PI price index construction price index,
construction material price index, etc..
16
Estimation of Construction-related Capital
Formation

• Expenditure on site clearance, preparation and
  land improvement, reclamation, etc
• Expenditure on construction of residential
  building(exclude movable dwelling such as boats,
  mobile home or caravans)
• Construction of buildings
• Facilities, equipment, facilities as integral
  part of building
• Architectural design

17
Estimation of Construction-related Capital
Formation

• Expenditure on non residential buildings,
  includes,
• Construction
• Architectural design
• Equipment, facilities and fixtures which are
  integral part of the building
• Site clearance and preparation for residential
  buildings

18
Estimation of Construction-related Capital
Formation

• Expenditure on construction of residential
  building(exclude movable dwelling such as boats,
  mobile home or caravans)
• Construction of buildings
• Facilities, equipment, facilities as integral
  part of building
• Architectural design
• Site clearance and preparation for non
  residential building

19
Estimation of Construction-related Capital
Formation

• Expenditure on other structures, includes
• Expenditure on site clearance, preparation and
  land improvement other than under buildings,
  reclamation, etc
• Engineering design and management
• Structures
• Related Construction Capital Formation
• Change in inventory (work in progress) ongoing
  construction by developers for which there is no
  contracted owners

20
Linkage of Construction Activity and
Construction-related Capital Formation

• Economic Activity
• Manufacturing
• Construction
• Business services
• Import
• Equipment
• Construction services

• Capital Formation
• Residential building
• Non residential buildings
• Other structures
• Change in inventory
• Land
• Intermediate input

Excludes construction for own final use
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Data Sources for Compilation of Construction and
Construction-related Capital Formation

• Economic censuses and surveys
• Output and cost of construction activities
• Main contractors
• Subcontractors
• Export of construction services
• Value of repair and maintenance
• Capital formation
• Expenditure on buildings and structures
• Purchase of equipment( for equipment and fixtures
  which are integral part of the structure not
  included in the payment for construction
• Work in progress (for developers)

22
Data Sources for Compilation of Construction and
Construction-related Capital Formation

• Household surveys
• Household economic activities on construction
• Own account construction
• Expenditure on construction of new residential
  building
• Government finance statistics
• Government expenditure on construction
• Government expenditure on architectural and
  engineering design, construction management
  services

23
Data Sources for Compilation of Construction and
Construction-related Capital Formation

• Foreign trade statistics
• Import of building fixtures and equipment
• Financial statement of companies
• Output and expenditure on intermediate input of
  construction companies and real estate developers
• Expenditure on building and structure, land
  improvement and equipment of all companies
• Other administrative-based data
• Application for building permits

24
Data Sources for Compilation of Construction and
Construction-related Capital Formation

• Price Statistics
• Construction price index
• Producers price index
• Import price index for construction materials and
  building fixtures
• Consumer price index
• Volume indices
• Employment index
• Volume of construction index
• Other related volume index

25
Weights in Construction GO, GVA and
Construction-related Capital Formation

• Use of Input-output table Ex_of_input_output_table
  .xls
• input structure of construction economic activity
  in input output table
• Structure of use disposition of output and import
  on construction-related activities
• Use benchmark or base year on GDP estimates
• Use of combined sources form government finance
  statistics, financial statements from companies,
  import statistics and household surveys
• Use of construction parameters