Construction output in Scotland

1
Construction output in Scotland

• Stephen Curtis,
• Office for National Statistics

2
Structure of the talk

• The register and the sample
• What information do we get?
• What do we produce for the UK?
• How do we use our information to produce data for
  Scotland?
• How reliable are the figures?

3
Coverage

• Our surveys cover
• Great Britain
• Construction, as in the Standard Industrial
  Classification, except SIC 41.1 (development of
  building projects)

4
The register

• To December 2009 was the Builders Address File
  (BAF)
• From January 2010, has been the Interdepartmental
  Business Register (IDBR)

Numbers of businesses
Employment 2009 (BAF) 2010 (IDBR)
0-3 136,007 172,808
4-114 57,209 49,828
115 and over 809 774
Total 194,025 223,410
of which, Scotland 15,732 (7.0)
5
Sample sizes

• Sample of 7,800 construction businesses
• Target for each set of results is for at least
  70 of forms to be back 80 by value of register
  turnover. Achieved.

Register employment Population count (Q4 2011) Proportions of turnover Sample size Sampling fraction
0-4 184,005 21.1 3,311 1.8
5-19 32,965 17.5 2,134 6.5
20-99 5,613 17.7 1,506 26.8
100 and more 831 43.7 831 100.0
223,414 100.0 7,782 3.5
50.2 by turnover
6
What information do we get?

• Up to December 2009, BIS obtained figures of
  output (quarterly) and new orders (monthly). For
  new work output there was only one question. For
  repair and maintenance there were 4 categories
• From January 2010, ONS has obtained figures of
  output (monthly) and new orders (quarterly). New
  work output is now split into 6 categories
  repair and maintenance into 5 (infrastructure
  added)

7
What the output survey measures

• Output, not turnover (excludes sub-contractors)
• Output of the construction industry, not
  construction output.
• Will exclude De minimis output
• Businesses not classified to construction
• Most direct labour departments
• Development of building projects

8
The output questionnaire
9
The new orders questionnaire
10
UK data

• From these questionnaires we can (and do) measure
  directly
• The value of output.
• The value of new orders obtained, in total, by
  region, and by type of activity.
• Both sets of figures are then deflated and
  seasonally adjusted. (Output is only seasonally
  adjusted quarterly).

11
Regional data

• For new work, we have no direct information on
  regional output
• For new orders of 100,000 or more we do have
  information about location of the work
• For new orders under 100,000 we assume they are
  located in the region of the firms address
• We can make assumptions about how long these
  orders take to fulfil
• Those assumptions are based on surveys from
  2005-2007

12
Location of construction work
New orders, Q4 2011, million
13
Fulfilling new orders
Proportions of all the work on the order
N N1 N2 N3 N4 N5 N6 N7 N8 N9 N10
Public housing 0.07 0.14 0.18 0.20 0.17 0.13 0.08 0.04
Private housing 0.07 0.13 0.17 0.19 0.17 0.13 0.09 0.06
Infrastructure 0.07 0.11 0.13 0.13 0.13 0.12 0.10 0.08 0.06 0.04 0.02
Public non-housing 0.08 0.16 0.20 0.20 0.17 0.12 0.07 0.03
Private industrial 0.16 0.28 0.27 0.17 0.09 0.05
Private commercial 0.12 0.20 0.21 0.19 0.14 0.09 0.05
N is the quarter that the new order arrives
N4 would be four quarters (one year) later, and
so on
14
New orders, Scotland
million
Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009
Public housing 13 103 64 155 113 91 130 171
Private housing 319 253 146 317 186 226 226 132
Infrastructure 128 185 59 240 434 110 132 202 305 96 89
Public non-housing 130 210 243 204 283 326 445 285
Private industrial 32 50 140 75 31 43
Private commercial 139 165 239 302 182 257 250
15
Contributions to output, Q4 2011, Scotland
million
Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009
Public housing 0.9 14.4 11.5 31.0 19.2 11.8 10.4 6.8
Private housing 22.3 32.9 24.8 60.2 31.6 29.4 20.3 7.9
Infrastructure 9.0 20.4 7.7 31.2 56.4 13.2 13.2 16.2 18.3 3.8 1.8
Public non-housing 10.4 33.6 48.6 40.8 48.1 39.1 31.2 8.6
Private industrial 5.1 14.0 37.8 12.8 2.8 2.2
Private commercial 16.7 33.0 50.2 57.4 25.5 23.1 12.5
16
Output, Q4 2011, Scotland
million
Q4 2011
Public housing 106
Private housing 229
Infrastructure 191
Public non-housing 260
Private industrial 75
Private commercial 218
Total 1,080 million
Note because the new orders source largely uses
the location of the building work, this mainly
represents some form of output in Scotland, not
necessarily output by Scottish businesses.
17
Other regions

• We then undertake the same calculation for each
  of the other regions of Great Britain
•   We compare the aggregate for all regions taken
  together with total output directly from the
  construction survey
• The total output figures first published for Q4
  2011 were

18
Published output, Q4 2011- new work only
million
Total new work 19,757 million
Q4 2011
Public housing 1,153
Private housing 4,089
Infrastructure 4,029
Public non-housing 3,176
Private industrial 872
Private commercial 6,438
19
Repair and maintenance

• Value of new work, Q4 2011 19,757m
• Repair and maintenance 11,185m
• Total, Q4 2011 30,942m
• So, new work 64 of the total repair and
  maintenance 36

20
Repair and maintenance by region

• Repair and maintenance data are collected in the
  output survey
• Assumed that repair and maintenance occurs in the
  region where the firm is based
• So, for example, all repair and maintenance in
  Scotland is assumed to be undertaken by firms
  with Scottish addresses
• No system of lagging new orders is needed

21
Deflation

• We often want to know not only the current value
  of building work, but whether the output of the
  construction industry is growing or shrinking in
  real terms
• To do that, we divide the current price amounts
  by an indicator of how prices have moved in the
  period (a deflator)
• We only deflate data for GB as a whole

22
Construction industry deflators

• Are obtained from the Building Cost Information
  Service (BCIS)
• Are of two types output deflators and tender
  price deflators
• Are used for Great Britain and for every region
  (by type of work)

23
Output and tender price deflators
Type of deflator
Public housing Tender price
Private housing Output price
Infrastructure Tender price
Public non-housing Tender price
Private industrial Tender price
Private commercial Tender price
Repair and maintenance Output price
24
Output price deflators
Figures for Q4 2011 (2005100)
Public housing 111.9
Private housing 119.0
Infrastructure 119.4
Public non-housing 109.0
Private industrial 108.1
Private commercial 100.9
Repair and maintenance 125.3
Derived from public housing RM 124.0
private housing RM 143.7 other categories of
RM 114.7
25
Seasonal adjustment

• We use the standard ONS method for seasonal
  adjustment, X-12 ARIMA
• Seasonal adjustment is applied individually to
  each type of work (public housing, private
  housing etc)
• Seasonal adjustment of total GB output is the sum
  of the component series
• Regional figures are not seasonally adjusted

26
Reliability of new orders as a leading indicator
GB data
27
The structure of Scottish construction
28
GB figures vs Scotland new work
29
GB figures vs Scotland RM
30
GB figures vs Scotland all work
31
Any questions?