Construction Output Price Indices (OPIs): Interim solution Quarter 1 (January to March) 2016

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. This article provides a quarterly update to these results and includes data to March 2016.

The data in this release (Quarter 1 2016) incorporates updated 2015 Output in the Construction Industry data to weight new work and repair and maintenance. The new weights affect the data from January 2015 onwards. For more information please see the background notes within this release.

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

The interim construction OPI for all construction rose 1.7% in the year to March 2016, down from an increase of 2.3% in the year to February 2016.

The interim construction OPI for all new work increased 2.2% in the year to March 2016, down from an increase of 3.2% in the year to February 2016. Public non-housing and private commercial are seeing the largest movements where prices for both increased by 2.3% in the year to March 2016.

The interim OPI for all repair and maintenance increased by 0.7% in the year to March 2016, up from a 0.6% increase in February 2016. This increase is mostly accounted for by the housing repair and maintenance sector, which saw an increase of 0.8% in the year to March 2016.

Prices continued to rise in the year to March 2016 for all work types.

Overall, prices in the construction industry, as estimated by the interim construction OPI, have risen between January 2014 and March 2016. 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). The peaks and troughs seen in the all new work index were driven by the earnings component of the OPI, which is sourced from the Average Weekly Earnings index for construction.

Annual growth rates in the interim construction OPI were positive throughout the January 2014 to March 2016 period (Figure 2) except for 1 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 2.2% in the year to March 2016. These changes were a result of increases in output prices in all sectors (Table 1).

All sectors show positive annual growth in March 2016. Public non-housing and private commercial are both seeing the largest movement with annual increases of 2.3%.

The interim OPI for all repair and maintenance increased 0.7% in the year to March 2016. Much of this increase was accounted for by a rise in the housing repair and maintenance sector, which saw output prices increase by 0.8% on the year (Table 2).