Table of contents
- Main points
- Things you need to know about this release
- All construction price inflation summary
- Annual rate of inflation for new work remains positive but slows on the year to September 2019
- Annual and monthly rates of inflation for repair and maintenance slow in September 2019
- Quality and methodology
1. Main points
The Construction Output Price Index (OPI) for all construction rose 3.0% in the year to September 2019, down from 3.4% in August 2019.
The OPI for all new work increased by 3.7% in the year to September 2019, down from 4.1% in August 2019; housing provided the largest contribution to the annual rate.
The OPI for all repair and maintenance increased by 1.5% in the year to September 2019, down from 1.7% in August 2019; the housing repair and maintenance sector increased by 1.4% over the 12-month period, providing the largest contribution to the annual rate.
2. Things you need to know about this release
The Construction Output Price Index is designated as a National Statistic, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Statistics.
Since taking responsibility for the Construction Price and Cost Indices (CPCIs) on 1 April 2015, we have developed the Construction Output Price Indices (OPIs). The indices use our existing data sources, all of which are National Statistics, so that users can be assured of the quality of the source data.
Improvements to the OPIs that have been implemented in the Quarter 3 2017 release were made in September 2017 and have been published in the article Construction development: impact of improvements to construction statistics (published 27 September 2019).
Prior to the Quarter 3 (July to Sept) 2017 release, the OPIs were calculated on a base year of 2010 (2010 equals 100). As of the Quarter 3 2017 release, the base year has been updated to 2015 (2015 equals 100).
The revision policy allows routine revisions to the component series for a period of five months, in line with the Producer Price Index (PPI), its main component.
The OPI will also be revised on an annual basis to account for the profit mark-up margin update, introduced as part of the methodological improvements in the July to September 2017 release. It would be expected that these changes would take effect in the April to June publication each year, although this may depend on the availability of the data. Alternative sources for profit mark-up data are currently being investigated as a future possibility to improve the timeframe and provide data continuity.
Due to the improvements made to the Construction Output Price Indices publication in Quarter 3 2017, this publication is now a statistical bulletin. Previous releases prior to this were published as articles.
Back to table of contents3. All construction price inflation summary
Overall, prices in the construction industry, as estimated by the Construction Output Price Index (OPI), rose 11.8% between January 2015 and September 2019 (Figure 1). Peaks and troughs seen within the new work index between January 2015 and September 2019 are mostly because of movements within the earnings component of the OPI, which is sourced from the Average Weekly Earnings (AWE) index for construction.
Figure 1: Construction prices generally rose between January 2015 and September 2019
Construction output price indices, UK, January 2015 to September 2019
Source: Office for National Statistics – Construction Output Price Indices
Download this chart Figure 1: Construction prices generally rose between January 2015 and September 2019
Image .csv .xlsThe annual rate of inflation for all construction was 3.0% in September 2019 (Table 1), down from 3.4% in August 2019. Annual growth for new work was 3.7% in September 2019, while annual growth for repair and maintenance was 1.5% in September 2019. Annual growth rates for the three main construction OPIs have remained positive since September 2015 (Figure 2).
| UK | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| All construction | New work | Repair and maintenance | |||||||
| Construction Output Indices Index (2015=100) | One-month rate | 12-month rate | Construction Output Indices Index (2015=100) | One-month rate | 12-month rate | Construction Output Indices Index (2015=100) | One-month rate | 12-month rate | |
| Sept 2018 | 107.7 | 0.2 | 2.5 | 109.1 | 0.2 | 2.8 | 105.0 | 0.1 | 1.7 |
| Oct | 107.7 | 0.0 | 2.5 | 109.1 | 0.0 | 2.9 | 105.0 | 0.0 | 1.6 |
| Nov | 108.6 | 0.8 | 3.0 | 110.4 | 1.2 | 3.8 | 105.2 | 0.2 | 1.7 |
| Dec | 108.6 | 0.0 | 2.7 | 110.4 | 0.0 | 3.4 | 105.3 | 0.1 | 1.7 |
| Jan 2019 | 108.9 | 0.3 | 2.5 | 110.7 | 0.3 | 3.1 | 105.5 | 0.2 | 1.6 |
| Feb | 109.4 | 0.5 | 3.1 | 111.2 | 0.5 | 3.7 | 105.8 | 0.3 | 1.7 |
| Mar | 109.6 | 0.2 | 2.7 | 111.4 | 0.2 | 3.1 | 105.9 | 0.1 | 1.5 |
| Apr | 110.2 | 0.5 | 3.0 | 112.2 | 0.7 | 3.6 | 106.1 | 0.2 | 1.5 |
| May | 110.7 | 0.5 | 3.2 | 112.9 | 0.6 | 3.9 | 106.3 | 0.2 | 1.6 |
| June | 111.1 | 0.4 | 3.3 | 113.4 | 0.4 | 3.9 | 106.5 | 0.2 | 1.6 |
| July | 111.3 | 0.2 | 3.4 | 113.7 | 0.3 | 4.2 | 106.6 | 0.1 | 1.7 |
| Aug | 111.2 | -0.1 | 3.4 | 113.4 | -0.3 | 4.1 | 106.7 | 0.1 | 1.7 |
| Sept | 110.9 | -0.3 | 3.0 | 113.1 | -0.3 | 3.7 | 106.6 | -0.1 | 1.5 |
Download this table Table 1: Construction output price, index values and growth rates, UK, September 2018 to September 2019
.xls .csv
Figure 2: Construction output annual rate has remained positive in the UK between September 2015 and September 2019
Construction output price 12-month percentage change, UK, January 2015 to September 2019
Source: Office for National Statistics – Construction Output Price Indices
Download this chart Figure 2: Construction output annual rate has remained positive in the UK between September 2015 and September 2019
Image .csv .xls4. Annual rate of inflation for new work remains positive but slows on the year to September 2019
The Construction Output Price Index (OPI) for new construction work rose 3.7% on the year despite displaying negative growth of 0.3% on the month to September 2019 (Table 2). The annual rate of inflation for new work fell 0.4 percentage points from 4.1% in August 2019. Infrastructure showed the largest annual growth at 4.5% in September 2019, although this slowed from a peak of 6.5% in August 2019.
Infrastructure OPI also had the largest negative monthly growth within new work at 1.3% in September 2019.
| UK | ||||
|---|---|---|---|---|
| New Work | ||||
| Construction Output Indices Index (2015=100) | One-month rate | 12-month rate | Change in the 12-month rate (percentage points) | |
| Housing (public and private) | 114.5 | -0.2 | 3.3 | -0.2 |
| Infrastructure | 110.6 | -1.3 | 4.5 | -2.0 |
| Public (other than housing) | 112.8 | 0.2 | 3.7 | -0.1 |
| Private industrial | 115.0 | -0.3 | 2.7 | -0.5 |
| Private commercial | 112.8 | 0.2 | 3.7 | -0.1 |
| All new work | 113.1 | -0.3 | 3.7 | -0.4 |
Download this table Table 2: New work output price, index values, growth rates and percentage point change to the 12-month rate, UK, September 2019
.xls .csvHousing provided the largest upward contribution to the 12-month rate in September 2019 at 1.27 percentage points. The largest downward contribution to the monthly rate for new work came from infrastructure at 0.26 percentage points (Figure 3).
Figure 3: Housing provided the largest contribution to the annual rate for September 2019
New work output price indices, contribution to one-month and 12-month growth rate, UK, September 2019
Source: Office for National Statistics – Construction Output Price Indices
Notes:
- Contributions to the rate may not add up to the rate exactly as a result of rounding.
Download this chart Figure 3: Housing provided the largest contribution to the annual rate for September 2019
Image .csv .xls5. Annual and monthly rates of inflation for repair and maintenance slow in September 2019
The Construction Output Price Index (OPI) for all repair and maintenance rose 1.5% in the year to September 2019 (Table 3), slowing from 1.7% in August 2019. Non-housing repair and maintenance showed the largest annual increase of 1.6% in September 2019.
On the month repair and maintenance displayed negative growth of 0.1%. This is the first negative growth in this sector on the month since June 2015.
| UK | ||||
|---|---|---|---|---|
| Repair and maintenance | ||||
| Construction Output Indices Index (2015=100) | One-month rate | 12-month rate | Change in the 12-month rate (percentage points) | |
| Housing repair and maintenance | 106.6 | 0.0 | 1.4 | 0.0 |
| Non-housing repair and maintenance | 106.6 | -0.1 | 1.6 | -0.3 |
| All repair and maintenance | 106.6 | -0.1 | 1.5 | -0.2 |
Download this table Table 3: Repair and maintenance output price, index values, growth rates and percentage point change to the 12-month rate, UK, September 2019
.xls .csvHousing repair and maintenance provided the largest upward contribution to the repair and maintenance annual rate at 0.77 percentage points. The downward contribution to the monthly rate came from non-housing repair and maintenance at negative 0.09 percentage points.
Figure 4: Housing repair and maintenance provided the largest contribution to the annual rate in September 2019
Repair and maintenance output price indices, contribution to 1-month and 12-month growth rate, UK, September 2019
Source: Office for National Statistics – Construction Output Price Indices
Notes:
- Contributions to the rate may not add up to the rate exactly as a result of rounding.
Download this chart Figure 4: Housing repair and maintenance provided the largest contribution to the annual rate in September 2019
Image .csv .xls6. Quality and methodology
The Construction Output Price Indices (OPIs) Quality and Methodology Information report contains important information on:
- the strengths and limitations of the data and how they compare with related data
- uses and users of the data
- how the output was created
- the quality of the output including the accuracy of the data
Information on the impact of further improvements implemented in the Quarter 3 (July to Sept) 2017 release, including the impact of rebasing and the addition of annual updates to weights, are highlighted in Section 7 of the Quarter 3 2017 bulletin.
Information on the impact of further improvements implemented in the Quarter 3 (July to Sept) 2017 release, including the impact of rebasing and the addition of annual updates to weights, are highlighted in Section 7 of the Quarter 3 2017 bulletin.
Further guidance on using indices in indexation clauses (PDF, 197KB) is also available.
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