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Construction In SNA

Construction In SNA Concepts and Estimation 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

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Construction In SNA

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  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..

  9. 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 Intermediate input Own final use Production Output

  11. 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

  12. 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. 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 Linkage of Construction Activity and Construction-related Capital Formation Excludes construction for own final use

  21. 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

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