Construction output price indices (OPIs), UK: July to September 2016

Since taking responsibility for the Construction Price and Cost Indices (CPCIs) on 1 April 2015, we have 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 September 2016.

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 September 2016, which is unchanged from the year to August 2016.

Prices continued to rise in the year to September 2016 for all work types, with the exception of infrastructure prices, which fell 0.6% on the year.

The interim construction OPI for all new work increased 1.9% in the year to September 2016, down from an increase of 2.0% in the year to August 2016. Private industrial showed the largest movement, with an increase of 3.7% in the year to September 2016.

The interim OPI for all repair and maintenance increased by 1.3% in the year to September 2016, up from a 1.0% increase in the year to August 2016. The housing repair and maintenance sector showed the largest increase of 1.6% in the year to September 2016.

Overall, prices in the construction industry, as estimated by the interim construction OPI, rose between April 2014 and September 2016. There is an upward trend evident across all new work, and repair and maintenance sectors from May 2014 up to September 2016 (Figure 1). The peaks and troughs seen in the all new work index between April 2014 and September 2016 were driven by the earnings component of the OPI, which is sourced from the Average Weekly Earnings (AWE) index for construction.

With the exception of April 2014, annual growth rates for the interim construction OPI were positive throughout the period to September 2016 (Figure 2). The fall occurred in the new work index where the 0.3% drop was driven by the earnings component of the OPI, which is sourced from the AWE index for construction. Repair and maintenance work shows positive year-on-year growth in all periods.

The interim OPI for all new construction work increased 1.9% in the year to September 2016. This increase was as a result of annual increases in output prices in all sectors, except infrastructure, which fell 0.6% on the year (Table 1). Private industrial showed the largest movement, where prices increased by 3.7% in the year to September 2016.

The interim OPI for all repair and maintenance increased 1.3% in the year to September 2016, with the housing repair and maintenance sector showing the largest annual increase of 1.6% (Table 2).