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New methodology for calculating the BCIS output price index

Published: 15/07/2021

BCIS has introduced a new methodology for calculating its All-in Output Price Index (OPI)

The BCIS OPI provides a measure of the average price paid by clients on construction projects currently on site and is based on tender prices in previous periods

The new methodology is based on lagging the BCIS All-in Tender Price Index (TPI) to a profile of project lengths over the previous 9 quarters to reflect the average estimated expenditure pattern of projects in the TPI.

The profile is as follows:

Lag Weighting
Current quarter 0.0%
1 quarter 9.5%
2 quarters 24.5%
3 quarters 20.7%
4 quarters 14.7%
5 quarters 11.5%
6 quarters 7.8%
7 quarters 5.5%
8 quarters 3.2%
9 quarters 2.6%
100.0%

 

The index will now be forecast.

The OPI has been recalculated back to 2017 to match the changes made to the TPI.

Before that date the OPI is based on individual project TPI applied to quarters over their contract duration. When changes were recently made to the BCIS All-in TPI methodology to compensate for the volatility resulting from small sample sizes in individual quarters, no changes were made to the Output Price Indices (OPI). As a result, the OPI has been volatile, not behaving as expected and lost its link to underlying TPI movement.

The BCIS OPI and TPI are published in the BCIS online service.

BCIS online

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