Construction Output Price Indices (OPIs): Interim solution, Quarter 4 (October to December) 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 our existing 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 4 (Oct to Dec) 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 construction output price index (OPI) for all construction rose 2.1% in the year to December 2015, down from an increase of 2.4% in the year to November.

The interim construction output price index (OPI) for all new work increased 2.8% in the year to December 2015, down from an increase of 3.1% in the year to November. The main 2 contributors to the rate came from public non-housing and private commercial, where prices for both increased by 3.2% in the year to December.

The interim OPI for all repair and maintenance increased by 1.1% in the year to December 2015, down from a 1.2% increase in the year to November. This increase is mostly accounted for by the non-housing repair and maintenance sector which saw an increase of 1.3% in the year to December.

Prices continued to rise in the year to December, despite monthly (November to December) decreases being seen for all work types.

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

Annual growth rates in the interim construction OPI were positive throughout the January 2014 to December 2015 period (Figure 2) except for one instance where prices were lower than in the same month of the previous year. This occurred in the New work index in April 2014 when the index fell 0.3% on the year. Repair and maintenance work shows positive year on year growth in all periods.

The interim OPI for all new construction work increased 2.8% in the year to December 2015. These changes were a result of increases in output prices in all sectors (Table 1).

All sectors show positive annual growth in December. Public non-housing and private commercial are seeing the largest movement with annual increases of 3.2%.

The interim OPI for all repair and maintenance increased 1.1% in the year to December 2015. Much of this increase was accounted for by a rise in the non-housing repair and maintenance sector which saw output prices increase by 1.3% on the year (Table 2).