Construction Output Price Indices (OPIs): Interim solution, quarter 3 (July to September) 2015

Since taking responsibility for the Construction Price and Cost Indices (CPCIs) on 1 April 2015, the Office for National Statistics (ONS) has developed an interim construction output price index (OPI). This index was put together in a short time frame and uses existing ONS data sources, the majority of which are National Statistics, so that users can be assured of the quality of the source data.

The results for the interim construction price index were published for the first time on 12 June 2015 and included data to quarter 1 (Jan to Mar) of 2015. This article provides an update to these results and includes data to quarter 3 (Jul to Sep) of 2015.

Information about the methods used to compile the interim construction OPIs, as well as the results of our recent user survey and plans for the future development of price indices for construction, were published on 28 September 2015.

• The interim OPI for all construction rose 2.0% in the year to September 2015, down from an increase of 2.3% last month.

• The interim OPI for all new work increased 2.7% in the year to September 2015, down from an increase of 3.0% last month. The main two contributors to the rate came from housing and private commercial, where prices increased by 2.6% and 2.9% respectively in the year to September.

• The interim OPI for all repair and maintenance increased by 1.0% in the year to September 2015, which is unchanged from last month. This change is mostly accounted for by the non-housing repair and maintenance sector which saw an increase of 1.3% in the year to September.

• Prices continued to rise in the year to September for all work types.

Overall, prices in the construction industry, as estimated by the interim construction OPI, have risen during the period January 2014 to September 2015. There is an upward trend evident across all new work and repair and maintenance sectors when compared with both the previous month and the same month a year ago (figure 1), with peaks in all new work in March and July 2015.

Annual growth rates in the interim construction OPI were positive throughout the January 2014 to September 2015 period (figure 2) except for one instance where prices were lower than in the same month of the previous year. The fall in the annual rate in April 2014 was due to a fall in the price of new work (across all sectors except infrastructure). Repair and maintenance work shows increases in price (positive annual growth rates) across the entire period.

The interim OPI for all new construction work increased 2.7% in the year to September 2015. These changes were a result of increases in output prices in all sectors (table 1).

All sectors show positive annual growth throughout the period with both public non-housing and private commercial leading the way in the latest period with the largest annual increase of 2.9%.

The interim OPI for all repair and maintenance increased 1.0% in the year to September 2015. Much of this increase was accounted for by a rise in the non-housing repair and maintenance sector which saw output price increases of 1.3% on the year (table 2).