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Announcement of Changes to New Orders in the Construction Industry

This information note provides details of three changes to New Orders in the Construction Industry release. These relate to:

a. The introduction of an alternative data source for measuring New Orders in the Construction Industry.

b. Changes to the release and timetable for publishing New Orders in the Construction Industry, from 13 September 2013.

c. Changes to the publication of New Orders in the Construction Industry tables, from 13 September 2013.

Background to New Orders in the Construction Industry estimates

The quarterly New Orders in the Construction Industry survey was transferred to the Office for National Statistics (ONS) by the Department for Business, Innovation and Skills (BIS) in 2010. The primary role of the survey is to:

  • convert Tender Price Indices supplied by BIS, into Output Price Indices (OPI’s); and

  • model regional breakdowns by type of work for the Output in the Construction Industry release.

A by-product of these data is a quarterly statistical bulletin and the set of data tables entitled New Orders in the Construction Industry. There have also been indications that these data are sometimes used as a predictor of the output in the construction industry. These data are not intended for this purpose and are not good predictors of output as some orders may not evolve into actual output, while other new orders may not reach the initial value of the order due to contracts being cancelled or otherwise finishing early. This issue is further compounded by the delay between an order being placed, the new order, and its eventual recording as output within the construction estimates.

The New Orders in the Construction Industry survey is sent to approximately 9,000 construction businesses, who are asked to provide the total value of the contracts they have won in a given month.  The coverage of this survey is unknown as there is no source available that measures the total number of contracts awarded in a given period.

The introduction of an alternative data source for measuring New Orders in the Construction Industry

Following a competitive tender process an alternative data source for measuring New Orders in the Construction Industry has been selected.  The contract has been awarded to Barbour ABI and ONS believes this new data source will improve its estimation of regional output in the construction industry and it’s OPI’s.

Under the contract Barbour ABI will supply the ONS with data on new orders by type of work on a regional basis. The collection of these data will take place through Barbour ABI’s existing and well established processes where sources are monitored daily to provide a comprehensive picture of construction projects. The primary source of data for this comprehensive picture is the planning process. All local authorities in England, Scotland and Wales are monitored daily to identify planning applications as soon as they are published. 

Other contract sources are also monitored to collect details of public sector tenders and new orders as they are placed. Additional client-side research is carried out to identify future planned projects funded by local authorities, government departments, deregulated industry and the largest property owners in the private sector. 

For all New Orders statistical releases after the 07 June 2013 release, this new data source will replace the current ONS New Orders in the Construction Industry survey sent out to 9,000 construction businesses each quarter. The new data source will improve coverage of new orders in the construction industry and remove the cost to businesses of responding to this survey, which is currently estimated to be £1.1 million per annum.

While the sub-contracting of data collection is a new concept for the compilation of New Orders in the Construction Industry estimates the process is not unique within the ONS. The ONS continually seeks improvements to the coverage, quality and cost effectiveness of our data collection. One such high profile collaboration is the use of market research to gather data directly contributing to both the Retail Price (RPI) and the Consumer Price (CPI) Indices.

A breakdown of the comparison between Barbour ABI data and ONS estimates are provided in Appendix 1. 

There will inevitably be differences to the price indices due to the differences in data although there are no plans in place to rework the historic data and revise previously published estimates (Appendix 2). Due to the improved quality of the new Barbour ABI data in compiling the Output Price Indices (OPI’s) there will be a quality benefit to end users of the constant price estimates derived from these OPI’s.

Changes to the release and timetable for publishing New Orders in the Construction Industry

Two individual statistical releases are currently published for New Orders in the Construction Industry and Output in the Construction Industry. The New Orders in the Construction Industry statistical bulletin is produced quarterly while the Output in the Construction Industry is produced monthly. To increase accessibility to both releases the New Order in the Construction Industry and Output in the Construction Industry releases will be combined within the quarterly Output in the Construction Industry statistical release. The effect of this is that the New Orders in the Construction Industry quarterly estimates will now be published one week later than currently published. This new publication approach will begin on 13 September 2013.

The New Orders in the Construction Industry release will now cease to be published as a standalone statistical output. The 07 June 2013 release was therefore the final publication of the New Orders in the Construction Industry bulletin.

Changes to the publication of New Orders in the Construction Industry estimates

In response to the recent consultation entitled ‘Publication of New Orders in the Construction Industry ‘, the ONS has decided to cease publication of a number of data tables which were shown to have limited benefit to users.

The New Orders in the Construction Industry release currently contains thirteen data tables, seven of which are published every quarter, while six are published as half yearly or annual tables. The consultation was designed to determine the wider use of these data tables and the impact of ceasing to produce individual tables. Analysis of responses to the consultation has led to the decision to cease publishing the following tables, from 13 September 2013:

Table Summary of Table
Table 1 Seasonally adjusted volume index numbers
Table 7 Seasonally adjusted volume growth rates by sector
Large Contracts Non-seasonally adjusted current price large contracts
Table A Non-seasonally adjusted current price half yearly by sector
Table B Non-seasonally adjusted current price half yearly by region
Table C Non-seasonally adjusted current price annual by county
Table D Non-seasonally adjusted current price annual by region
Table 1.7 Non-seasonally adjusted current price by contract duration

And continue to publish the following tables:

Table Summary of table
Table 2 Seasonally adjusted volume by sector
Table 3 Non-seasonally adjusted volume by sector
Table 4 Non-seasonally adjusted current price by sector
Table 5 Non-seasonally adjusted current price by type of work
Table 6 Non-seasonally adjusted current price by region

These output tables will continue to be produced using the Barbour ABI data as a direct replacement for the data supplied by the New Orders survey. At nominal prices, only table 5 – Output by type of work and table 6 – Output by region will be affected by these new data.

Contacts:

Media contact:
Tel Media Relations Office    +44 (0)845 6041858
Emergency on-call    +44 (0)7867 906553
Email  press.office@ons.gsi.gov.uk

Statistical contact:
Name Kate Davies
Tel +44 (0)1633 456344
Email construction.statistics@ons.gsi.gov.uk

Contact us:
Tel  +44 (0)845 601 3034
Email  info@ons.gov.uk
Website  www.statistics.gov.uk
Twitter  www.twitter.com/statisticsONS

Issued by: Office for National Statistics, Government Buildings, Cardiff Road, Newport NP10 8XG

© Crown copyright 2013.

Appendix 1
Comparisons of ONS/Barbour ABI all new work estimates

A comparison between ONS and Barbour ABI data has been made and cumulative comparisons over three years show that at the all new work level there is a small difference between the two sources.  The cumulative total for Barbour ABI is slightly different from ONS’ as ONS data does not capture all contracts due to there being no imputation for non-response whereas Barbour ABI captures all contracts over £100,000.

All new work - cumulative

The differences between the two sources in the level series are more noticeable. ONS believes that reasons for these differences are the under-coverage of contracts in the ONS series and that some may have been reported for the wrong periods.

All new work - levels

Appendix 2
Comparisons of New Orders Series (Q1 2009 – Q4 2011) on Construction Output Price Indices (COPI)

New Orders data are used to convert Tender Price Indices to Output Price Indices and the most commonly used is the All New Work Output Price Index. Table 1 shows that there are minimal differences between the published series and that calculated when using Barbour ABI data.

Table 1: Differences to COPI (All New Work Output Price Index)

    Published1 Barbour ABI2 Difference
2009 Q1 113.6 113.6 0.0
Q2 112.2 112.3 -0.1
Q3 111.4 111.6 -0.2
Q4 109.9 110.1 -0.2
2010 Q1 108.4 108.5 -0.1
Q2 107.7 107.8 -0.1
Q3 106.9 107.1 -0.2
Q4 107.1 107.3 -0.2
2011 Q1  107.8 108.1 -0.3
  Q2 108.8 109.1 -0.3
  Q3 109.2  109.4 -0.2
  Q4 110.2 110.4 -0.2

1Published means based on ONS's New Orders estimates
These data can be found in ONS's latest Construction Output publication

2Barbour ABI means based on Barbour ABI's New Orders estimates

 

Content from the Office for National Statistics.
© Crown Copyright applies unless otherwise stated.