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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

Construction In SNA

Concepts and Estimation

topics
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
classification of construction
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
classification of construction4
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
classification of construction5
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
construction related economic activity
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
sna classification of construction related capital formation
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
sna classification of construction related capital formation8
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..
estimation of output and value added of construction
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

slide10

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

estimation of output
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

estimation of output12
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
estimation of gross value added
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)

estimation of gross value added14
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

estimation of gross value added of construction at constant prices
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..

estimation of construction related capital formation
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
estimation of construction related capital formation17
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
estimation of construction related capital formation18
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
estimation of construction related capital formation19
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
linkage of construction activity and construction related capital formation
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

data sources for compilation of construction and construction related capital formation
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)
data sources for compilation of construction and construction related capital formation22
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
data sources for compilation of construction and construction related capital formation23
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
data sources for compilation of construction and construction related capital formation24
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
weights in construction go gva and construction related capital formation
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