Following the recent row over the accuracy of the Office for National Statistics’ construction data, Construction News hears from the organisation on its decision not to extend its contract with Aecom and how it plans to improve performance.
The ONS’ construction statistics provide the biggest and, we believe, the best measure of the UK’s construction sector.
Its construction output survey samples 8,000 businesses each month across all regions of Great Britain.
It covers businesses of all sizes and types, including all companies with employment greater than 100 or with a turnover of over £60m per year and employment of 10 or more.
We have been publishing both construction output and new orders since 2008, when responsibility for their production was transferred to us from the Department for Business, Innovation and Skills.
“We have embarked on a programme of continuous improvement”
However, BIS continued to publish the construction Price and Cost Indices, produced by subcontractor BCIS, which the ONS used to strip inflation out of the data.
Since ONS took responsibility for construction statistics, we have embarked on a programme of continuous improvement.
Building on progress
In 2009, a larger survey was introduced, which better reflected the make-up of the sector.
Alongside this, we began publishing monthly to provide more timely data to users.
In 2013, we also introduced monthly seasonal adjustment to allow these figures to be more easily compared with the quarterly data published in ONS’ National Accounts.
ONS changed new orders to being a quarterly publication.
However, we significantly improved the quality in 2013 when we changed to using data from Barbour ABI, providing almost complete coverage of orders being placed in the sector compared with a previous coverage of only 70 per cent.
BIS ceased publication of the previous BCIS PCIs in December 2014.
“ONS has developed an interim solution to replace the forecasted deflators”
However, new PCIs being developed separately by Aecom were not yet ready for publication.
Since this time, ONS has used forecasts of the previous BCIS deflators to strip out inflation.
In December 2014, following an assessment by the UK Statistics Authority, the national statistics status of ONS construction statistics was suspended, due to ONS not being able to provide assurances on the quality of the deflators to users.
The contract with Aecom for the production and publication of PCIs was transferred from BIS to ONS on 1 April 2015.
Since then, ONS has developed an interim solution to replace the forecasted deflators.
These new interim PCIs will be introduced on 12 June and be used on all construction data from Q4 2014.
After reviewing our contract with Aecom, and taking account of the work we had undertaken to develop intermediate construction price indices, it was decided not to offer Aecom an extension to its contract and instead continue to develop a long-term solution in-house.
We will continue to work with users to consider the best approach to develop new methods in the long term.
ONS will publish full plans for this long-term development by the end of 2015.
We have come a long way in six years.
While there are still further improvements that need to be made, we believe that we are producing high-quality statistics that paint an accurate picture of the construction sector.
Kate Davies is head of construction statistics at the Office for National Statistics