Transcript slides

Value of Construction Put in
Place Series
(VIP)
www.census.gov/constructionspending
Conducted by The U.S. Census Bureau’s
Construction Expenditures Branch
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What Is Value of Construction Put
in Place (VIP)?
• The VIP series provides monthly (preliminary
and 2 months of revision) and annual
estimates of the value of construction work
done on all projects underway during a given
time period.
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What Does the VIP Take Into
Account?
•
The value of the construction is based on:
1. Cost of materials installed or erected.
2. Cost of labor (both by contractors and force account)
and a proportionate share of the cost of construction
equipment rental.
3. Contractor’s profit.
4. Cost of architectural and engineering work.
5. Miscellaneous overhead and office costs chargeable to
the project on the owner’s books.
6. Interest and taxes paid during construction (except for
state and locally owned projects).
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About the VIP Statistics…
• Estimates are developed from nationwide
surveys of construction projects as well as
from indirect estimates and statistics from
secondary sources such as regulatory
agencies and trade associations.
4
About the VIP Statistics…
• Classifications of construction are based on
ownership and/or primary use of structures
on a property.
• Data are shown in current dollars, unadjusted
and seasonally adjusted terms.
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The VIP Series
Total Construction
– Private Construction
• Private Residential
– New Single Family
– Multi-family (C-700)
– Improvements (monthly series not shown separately)
• Private Nonresidential
– Private Nonresidential (C-700)
– Farm Construction
– Regulated investor owned utilities
– Public Construction
• State and Local (C-700)
• Federal (C-700)
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Private Construction Methodology
• Private Residential
– New Single Family
• Monthly construction cost of new single family houses are
estimated using housing starts and sales data from the U.S.
Census Bureau’s Survey of Construction (SOC).
• Estimated cost is distributed into monthly VIP by applying fixed
patterns of monthly construction progress as shown below.
• Total cost = (# of units started) x (average construction cost).
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Private Construction
Methodology
– Multi-family
• A subsample of new residential building projects with two units
or more is selected from SOC.
• Upon selection, monthly construction progress reports (C-700
form) are requested until completion.
• VIP estimates = Σ [(final weight) x (reported value)]
• Final weight = (basic weight) x (unit adjustment factor) x
(adjustment factor for architectural, engineering, and
miscellaneous costs).
– Basic weight is the reciprocal of the probability of selection.
– Unit adjustment factor is the ratio of the unbiased estimate
obtained from the Census Bureau’s Building Permits Survey to
the unbiased estimate from the Multi-family survey of the number
of multi-family units authorized in a month.
– Adjustment factor accounts for the architectural, engineering
and miscellaneous costs that are not accounted for on monthly
reports. The adjusted factor is defined as the ratio of the total
estimated value to the estimated construction cost.
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Private Construction
Methodology
– Improvements
• Estimates on owner-occupied properties are based on data
from the Consumer Expenditure Survey (CE) conducted by the
Census Bureau for the Department of Labor’s Bureau of Labor
Statistics (BLS).
• Data are collected through a rotating panel survey design.
There are three panels interviewed per quarter. Data
collection for expenditures in a particular month will be
completed three months later and an estimate based on all the
data will be available five months later.
• Estimates for owner-occupied residential improvements are
based on reported data and forecasts.
• Improvement estimates are subject to substantial revisions
due to necessity of forecasting.
• Time series techniques with the X-12-ARMIA program are
used to remove the irregular effect.
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Private Construction
Methodology
• Private Nonresidential Construction
– The Census Bureau conducts a monthly Construction
Progress Reporting Survey for estimating the value of
private nonresidential construction in the U.S. using two
sources of information for identifying projects.
• Data from McGraw-Hill Construction (MHC) on projects valued
at $75,000 or more in the U.S.
• Projects in a sample of areas not covered by building permit
systems or reported by MHC.
– Once a project is selected, monthly construction progress
reports (C-700 form) are requested until project is complete.
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Private Construction Methodology
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Private Construction
Methodology
• Private Nonresidential Construction
– Data from MHC are stratified by type of construction and
construction value and each stratum is assigned a sampling
rate. Out of 66 strata, 16 are certainty and have a sampling
rate of 1-in-1. The remaining 50 have sampling rates seen
below.
– Projects from nonpermit areas are selected with virtual
certainty.
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Private Construction
Methodology
• Private Nonresidential Construction
– Estimate of VIP are obtained by multiplying the
final weight of each project by the monthly
reported value and summing all projects. Note:
Tabulation of private nonresidential, state and local, and federal
surveys are similar.
• Final weight = (basic weight) x (outlier adjustment factor)
x (adjustment factor for architectural, engineering, and
miscellaneous costs) x .99 (frame duplication factor)
– Basic weight is the reciprocal of the probability of
selecting a project
– Outlier Adjustment factor reduces the influence on the
VIP of an extreme non-certainty observation.
– Adjustment factor is computed the same as in the Multifamily survey (see slide 8)
– Frame duplication factor adjusts for duplicated in the
frames. Factor is .99 for private nonresidential projects.
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Private Construction Methodology
• Private Nonresidential Construction
– Imputations
• Imputations are made for projects that have not reported
at the time of the monthly tabulations.
– Based on estimated total construction value and month of
start of the project.
– Undercoverage
• Results are increased by 25% to account for
undercoverage of construction projects not reported by
MHC.
– Adjustment for undercoverage results from comparison
studies of Dodge reports with building permits for a sample
of projects for which permits were issued.
– Benchmarking
• The manufacturing category is further adjusted by
benchmarking the tabulated estimates to the latest
detailed structures data from the Census Bureau’s
Annual Capital Expenditures Survey (ACES).
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Private Construction Methodology
• Private Nonresidential Construction
– Farm Construction
• VIP estimates for new farm nonresidential construction
are extrapolated from the annual U.S. Department of
Agriculture (USDA) report, Income and Balance Sheet
Statistics.
• Monthly or quarterly estimates are not available.
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Private Construction Methodology
Regulated Investor-Owned Utilities Construction
• Monthly estimates are published only for
communication and electric, but estimates for other
public utilities are included in the appropriate totals.
– Communication
• Telephone
– VIP estimates are based on reports of actual monthly
construction progress.
• TV cable
– Monthly estimates are based on annual forecasts from SNL
Kagan.
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Private Construction Methodology
– Power
• Regulated Utilities
– Gas and Electric Categories
» Monthly estimates are based on annual forecasts from Edison
Electric Institute and the American Gas Association.
– Oil
» Estimates are projections from the latest year of Federal Energy
Regulatory Commission data.
• Nonregulated Utilities
» Expenditures are gathered in the same method as private
nonresidential construction (see slide 10).
» These estimates are included in the appropriate utilities totals.
– Railroad
– Monthly estimates are obtained by distributing Surface
Transportation Board quarterly construction expenditures
estimates into monthly values.
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Public Construction Methodology
• State and Local
– Averages about 8,500 projects at any one time.
– Information for creating the sampling frame is obtained from the same MHC data
used for private nonresidential construction (see slide 10).
– Projects are stratified by type of construction and value. There are 72 strata, 15
certainty and 57 non-certainty. Within each of the 57 non-certainty strata, a
systematic sample of projects is selected each month (see table below).
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Public Construction Methodology
• State and Local
– Tabulation of data is the same as for private nonresidential
construction (see slides 13-14).
– Undercoverage: State and Local Undercoverage Evaulation (SLUE)
• The results are then increased by the undercoverage adjustment
factors to account for construction projects not reported by MHC.
These adjustment factors result from a comparison study of projects
provided to us directly from state and local agencies with the list of
state and local projects from MHC.
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Public Construction Methodology
• Federal
– Averages about 700 projects at any one time.
– Information for creating the sampling frame is obtained from the same MHC data used for
private nonresidential construction (see slide 10).
– There are 84 strata, 25 are certainty strata. From the remaining 59 non-certainty strata, a
systematic sample of projects is selected (see table below).
– Tabulation of the data is the same as for private nonresidential and state and local
construction (see slides 13-14).
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Public Construction Methodology
• Federal
– Benchmarking
• Federal is further adjusted by benchmarking the
tabulated estimates to monthly data, which with few
exceptions, are supplied to the Census Bureau by each
federal agency involved in construction activities.
– Estimates from those exceptions may be obtained from
federal budget documents. These budget totals are then
prorated over the fiscal year to derive monthly estimates.
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The Construction Spending
Press Release
• The press release is issued on the first
working day of each month 2 months after the
reference month.
– At 9:30 a.m. the press receives the release.
– At 10:00 a.m. the press release, along with more
detailed data are posted to our website.
www.census.gov/constructionspending
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In The Works
– Wind Power
• Monthly estimates are based on Lawrence Berkeley National
Laboratory and American Wind Energy Association.
• Currently wind is included in the total power category. Efforts are
being made to include wind as part of the electric subcategory.
– ACES
• This annual May release, private nonresidential manufacturing
will use the 2008 ACES to benchmark back to 2004.
– Residential Improvements
• Efforts are being made to revamp the residential improvements
survey since the discontinuation of the Survey of Residential
Alterations and Repairs (SORAR) in 2007.
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