cLa yl j4jo Third Quarter (Base Year 2013) Detailed by: Main building materials andTable of Contents Introduction Key Points. A. Construction Cost Index (CCl) for the third quarter of 2015 compared with the third quarter of 2014.5 B. Construction Cost Index (CC) for the third quarter of 2015 compared with the second quarter of 2018... CCI Methodology 8 Methodology Introduction 8 What is the Construction Cost Index? 8 Importance of the Construction Cost Index 8 Updating the Construction Cost Index 9Introduction ‘The Construction Cost Index (CCI) is an important statistical indicator for the purposes of planning and research in various disciplines. Statistics centres and agencies in different countries consistently compile these indices, based on the prices of a group of building materials and construction services commonly sed during the construction process. The figures thus calculated constitute a time series that provides a measure of changes in the cost of construction over time. Therefore, Statistics Centre - Abu Dhabi has always taken interest in collecting the prices of those materials and services on a regular basis and publishes the indicators derived from this data, following the methodologies adopted internationally n this field. The Price Indices Section at the Statistics Centre ~ Abu Dhabi compile the CCI to be calculated according to the ten main groups of the construction cost index basket with a base year of 2013. ‘The selected sample of items included in the Construction Cost Index basket uses actual data collected from the Contractors’ Association in Abu Dhabi. The sample of sources (building materials and construction service providers) were selected in such a way to represent the market condition across the Emirate of Abu Dhabi It is worth mentioning that this publication covers only the relative importance of each one of the main construction groups for towers. Further development of the index will add the rest of the construction sectors, according to the construction classification used in the Emirate of Abu Dhabi.Key Points This publication provides an analysis of the results of the CCI for the third quarter of 2015 compared with the third quarter of 2014, where 2013 is the base year. In addition, the publication provides a comparison between the second quarter of 2015 and the third quarter of 2015. The main findings of this analysis are outlined below: ‘+ The CCI decreased by 0.1% to 98.7% in the third quarter of 2015, compared with 98.8% in the third quarter of 2014. ‘+ The CCI increased by 1.5%, from 97.2% in the second quarter of 2015 to 98.7% in the third of quarter 2015, Table 1: Construction Cost Index ccl So Co CA C3 a 2014 89.7 100.7 98.8 100.1 2015 ort 972 98.7 - —%— Relative change 26 34 Ot - ‘Souroer Siatatios Contre = Abu Dhabi Figure 1: Construction Cost Index, quarterly for 2014 and 2015, 1010 1005 100.0 995 99.0 98.5 98.0 975 970 96.5 74 96.0 12014 = 22014-3214. QH IIE = QUIS QZIOIS ——«QB.2OIS ‘Source: Stalaties Contre - Abu DhabiA. Construction Cost Index (CCl) for the third quarter of 2015 compared with the third quarter of 2014 Table (2) shows the 10 main groups for the building materials and construction services, categorized ‘according to the construction uses. In addition, the table shows the weights for the main construction groups. Weight represents the proportion of spending on the group in the project to the overall spending ‘on all groups. Moreover, the table shows the relative change for the third quarter of 2015 compared with the third quarter of 2014, while contribution reflects the proportion of each group's contribution to the ‘overall change (-0.1)% in the prices of all groups for the third quarter of 2015 compared with the third quarter of 2014. ‘Table 2: Major construction groups by weights, relative change and contribution for the third quarter of 2015 compared with the third quarter of 2014 Relative Cont Poorer Corer ‘Construction materials 13.0 “116 Finishing materials 26.0 23 7A Electrical works materials 80 64 66 Mechanical works - plumbing and drainage materials, 40 0.3 ot Mechanical works - fre fighting 30 00 0.0 Mechanical works - AIC 70 o7 12 Equipment 20 69 19 Manpower 29.5 54 18.4 Services 45 79 45 Finances and Bonds 3.0 0.0 0.0 Total 100 oA - ‘Souroe: Salas Contre = Abu Dhar ‘The above table shows the ‘Construction materials’ group accounted for the largest fall in the index during the third quarter of 2015 compared with the third quarter of 2014, contributing -18.8% to the change. This contribution resulted from a decrease of 11.6% in the prices of this group. This main group consists of three sub-groups, with the prices of the 'Steel reinforcement’ group decreasing by 23.1%, and the prices of the ‘Concrete’ group decreasing by 2.2%. While the ‘Formwork materials’ group prices. increased by 3.7%. The second highest contributor to the overall decrease in the CCI during the third quarter of 2015 compared with the third quarter of 2014 was the ‘Electrical works materials’ group which accounted for 6.6% of the overall decrease. This contribution resulted from a decrease of 6.4% in the prices of this group. Prices of the ‘Services’ group decreased by 7.9% during the third quarter of 2015 compared with the third quarter of 2014, contributing -4.5% to the change. This main group consists of two sub-groups, which are ‘Plant & machinery’ and ‘Fuel/ energy’, which their prices decreased by 0.4% and 26.0% respectively.‘At the same time, the prices of ‘Manpower’ rose by 5.1%, contributing 18.4% to the change. This main ‘group consists of three sub-groups, which are the ‘Project manpower’, ‘Overhead expenses’ and ‘Construction supervision’ groups, The ‘Project manpower’ group had the greatest impact in increasing the prices of this main group by 19.4%. The prices of Finishing materials’ ‘Equipment, ‘Mechanical works - AIC! ‘Mechanical works - plumbing and drainage materials’ increased by 7.4%, 1.9%, 1.2% and 0.1% respectively. ‘The prices of ‘Mechanical works - fire fighting’ and ‘Finances and bonds’ remained constant during the third quarter of 2015 compared with the third quarter of 2014 Figure 2: Relative change in CCI for the main groups during the third quarter of 2015 compared with the third quarter of 2014 Mechanical works- AC [fj 0.7 Mechanical works - plumbing and drainage materials f 0,3 6.4 I etectricat works materials Finishing materials UII) 2.3 11.6 ET construction materias “15.0 -10.0 5.0 00 5.0 10.0 % istics Centre - Abu DhabiB. Construction Cost Index (CCl) for the third quarter of 2015 compared with the second quarter of 2015 ‘The construction cost index increased by 1.5% in the third quarter of 2015 compared with the second quarter of 2015. This overall increase in prices between the two quarters reflects the net movement (increases and decreases) of building materials and construction services during the two quarters. The prices of the ‘Manpower’ group increased by 10.3%. It consists of three sub-groups, which are the ‘Project manpower’, ‘Overhead expenses’ and ‘Construction supervision’ groups. Prices of ‘Mechanical works - plumbing and drainage materials’ increased by 0.8%. This main group consists of 13 sub-groups including water pipes & fitings, water pumps, water fitration systems... et. ‘The following table shows price changes of the building materials and construction services basket during the third quarter of 2015 compared with the second quarter of 2015. It also shows the weights of the construction cost indices for the two quarters according to the main construction groups. Table 3: Major construction groups by weights, relative change for the third quarter of 2015 compared with the second quarter of 2015 ron changes of Tiere Gakegen Gaxsecn ei ‘Construction materials. 13.0 89.4 87.1 2.6 Finishing matels 20 toast Electrical works materials 8.0 101.5 96.4 51 Mecharicl works plumbing and ranage 40 t004 = wig mona Mechanical works - fire fighting 3.0 100.0 100.0 0.0 Mechanical works - A/C 7.0 101.7 101.4 06 Equipment 20 tt54 ta Manpower 29.5 O14 100.8 10.3 Senices 45864 woo 77 Finances and bonds 3.0 100.0 100.0 00 Total to oa er 4s ‘Souroor Salas Contre = Abu DhabrCCI Methodology Methodology Introduction Statistics Centre - Abu Dhabi is the sole official body responsible for calculating and publishing the Construction Cost Index (CCl) within the Emirate of Abu Dhabi on a quarterly basis. This project started in 2013 in cooperation with authorities specialized in this field, such as the Contractors’ Association in ‘Abu Dhabi, Abu Dhabi Municipality and Department of Economic Development to prepare the weights, list of building materials and services. The classifications are adopted in the Department of Economic Development for contractors. This index is calculated starting from the first quarter of 2014. The frst quarter of 2015 was the first release of this publica construction cost index in future years to include other categories. This publication includes weights related to tower projects with medium quality, later it will include weights for residential villas, bridges and road projects as a next stage in the development of the construction cost index. Further development will be done on the ‘The methodology used in the calculation of the construction cost index is consistent with the international best practices and recommendations in this area. What is the Construction Cost Index? ‘The CCI is an index that measures the rate of change in construction costs during two time periods, a base period (2013 in SCAD) and a comparison period for a fixed basket of certain building materials and construction services selected from the construction projects breakdown. The period against which prices are compared is known as the base period and the period under review is known as the comparison Period. Importance of the Construction Cost Index ‘The CPI provides quarterly estimates on the rate of change in the prices of building materials and construction services basket in the Emirate of Abu Dhabi. Some of the significant uses of the CCI are: ‘+ Assist in the calculation of other data within the Centre such as the national accounts statistics. ‘+ Helps contractors and interested parties in identifying trends in construction costs within the Emirate of Abu Dhabi. + Helps other government departments such as gaining knowledge about developments in the ‘municipal construction sector. + Provide general data on construction costs that serve different users of official statisticsUpdating the Construction Cost Index ‘The Construction Cost Index is updated on a regular basis once the necessary data becomes available. Usually the update takes place through communication with the Contractors’ Association in Abu Dhabi to update weights or the sample. The importance of updating the weights of building materials and services involved in construction projects of the Construction Cost Index basket is that these weights should represent the common construction style in the Emirate of Abu Dhabi. The following points describe the methodology of the Construction Cost Index in the Emirate of Abu Dhabi 4. CCI Compilation ‘The CClis calculated using the Laspeyres method ccr=> Px WwW. 0 Prices of building materials and services of the CCI basket are collected periodically, except for some sub groups like copper materials and transformers, which are collected on a quarterly or semi-annually basis. ‘The current CCI uses 2013 as the base year in the Emirate of Abu Dhabi. The current CCl basket consists of 592 building materials and services. ‘The average item price is calculated at the main group level using the geometric mean of elementary ‘aggregates. The price ratio is calculated by dividing the comparison price by the base price, while the new price is calculated by multiplying the result by the base price. To calculate the CCl on the sub- group level, the new weight of all goods and services of the sub-group should be added and then divided by the base price of the same group. The CCl of the main groups and the general CCI are calculated using the same method. 2. Weights ‘The Construction Cost Index is a weighted average of the change in the price of building materials and 85 of the CCI basket. The weight of the building material or service reflects its relative importance, related to the project. Through cooperation with the Contractors’ Association of Abu Dhabi relative values se of building materials and services were extracted that are involved in projects of medium quality towers in the Emirate of Abu Dhabi for 2013.Table 4: Relative importance for ten main groups included in the construction cost index: rary irc 4 Construction materials 13.0 > Finishing materials 26.0 3 Electrical works materials 80 4 Mechanical works — plumbing and drainage materials 40 5 Mechanical works — firefighting 30 6 Mechanical works — A/C 70 7 Equipment 20 5 Manpower 295 6 Services 45 “0 Finances and bonds (insurance and bonds, finance costs) 30 J 3. CCl basket After calculating weights and identifying building materials and construction services representing the CCI, 10 main groups, 70 sub-groups and 592 materials and services in the construction cost index basket were identified. The 10 main groups and 70 sub-groups are shown in the following table:Table 5: Main and sub groups included in the construction cost index basket - Towers: 2.10 3a 32 33 34 35 38 37 38 39 3.10 34 44 42 43 44 45 48 47 48 49 44 4am 412 4.43 54 82 53 54 rrr ‘Construction Materials Concrete Steel Reinforcement Formwork Materials ishing Materials Blocks Cement Sand & Aggregates Ceramic Ties Marble Tiles Wooden Doors, wardrobes and Kitchens (Fire Rated or Non) Paints & Coatings Suspended Celings Water Proofing Metal Works and Glazing Electrical Works Materials Distribution Panels Main, SubMain, Final 1600A & 2000A Busbar runs fora typical 20 storey building Wires & Cables PVC Conduits, Boxes & accessories Switching Accessories & Isolators Light Fortures Transformers/HV gear Metal Trays & Trunking Low Current systems, Tol, FA, SMATV, CCTV Generator system Earthing System / Lightning Protection Mechanical Works - Plumbing and Drainage Materials 3 inch UPVC Pipes & Fitings Cold Water Riser 2 inch PPR Pipes & Fittings for Internal Water supply 46mm - 2.5mm thk Pex Pipe System for water supply in walls 3 Inch Gate Valves,( Strainers & Vents) Water Pumps: Water Tanks insulated sectional GRP Tanks 6X4X2 MT. Water Heaters Water Fitration system 3/4 Inch Water Meters (8/4 Inch Water Meters Mechanical Made in Italy) 4 Inch HOPE Drainage Pipes & Fittings - Int 4 Inch UPVC Drainage Pipes class 6 & Fittings - Ext 3 Inch Floor & Gully Traps and Roof drains Manhole Covers & Gratings Mechanical Works - Fire Fighting Fire Pump Set - Supply Only Stainless steel FF Cabinet & Hose Reel ‘Seamless steel FF Pipos & Fitings Valves Air vents & Accessories Dory i 13.00 4.50 6.60 1.90 26.00 2.30 041 027 2.98 244 677 054 ot oa 394 8.00 4.22 163 114 oat 0.33 os? oat 016 163 0.33 0.18 4.00 017 083 ot 013 ost 042 ot 013 0.08 0.76 0.08 ost oar 3.00 042 0.5 141 0.3555 56 87 64 62 63 64 65 66 87 68 69 64 ant 612 613 et e15, 6.16 a7 ete 7A 72 73 aa 82 83 ea 92 0 Pendant Ceiling Type Sprinkler Heads 6 kg bef Portable Extinguishers 3 inch Breeching Inlet Mechanical Works - A/C 300 Ton Chiller unit - SCREW type (AIR COOLD SCREW CHILLER) 2 ton FCU (FAN COIL UNIT - DUCTED) 48 ton AHUs (AIR HANDLING UNIT) 300 GPM 100 FT Head Chilled Water Pumps. ‘Sch 40 black stee! seamless 4 inch Chilled Water Pipes & Fittings AFICO HD Fiberglass Insulation ‘AIC Duct sheet GI guage 24 (Gi Sheet 4 x8 x 249) 25 mm thk Fiber Glass AIC Duct insulation Canvasiwoven Cloth (FLEXIBLE DUCT CONNECTOR) ‘Adhesive & Coating (TAPES) Dampers & Accessories Pipe & Duct supports Grilles & Diffusers Exhaust Fans (Wall & Window) Roof Fans Thermostats / Controls Aluminium Cladding (Aluminium Sheet 4 x 8 24g) ‘Sound Attenuators, Equipment Lins Facade Cleaning Garbage Chute Manpower (Over Head Expenses Construction Supervision Project Manpower Services Plant & Machinery FueliEnergy Financos & Bonds (Insurances & Bonds, Finance costs) 0.28 on oor 7.00 1.94 074 052 01s 0.60 022 07a 022 oor oa? 022 0.5 022 0.30 0.07 022 015 0.07 2.00 1.50 0.30 0.20 29.50 531 531 18.88 450 3.19 131 3.00 4, Sources of Building Materials and Services Price data were collected through field visits conducted by a team from SCAD's Prices & Income Section in cooperation with the Contractors’ Association and from other approved sources. The team updates these sources on a regular basis if any source closes down or relocates premises. The number of sources is 61 5. Collection of Price Data Price data collection is a crucial stage that requires a significant amount of time and effort. The collection of price data is conducted by different communication means like e-mails and through field visits by employees who are well trained. To ensure the accuracy of the collected prices, the price of a sample of building materials and services are reviewed through field visits and by ensuring the availabilty of the‘company’s seal or signature on the price documents or by email from the person responsible for providing prices. In order to develop the collection of prices and keep up with advances in information technology mechanism, the center plans to automate the compilation process of the construction cost index as a future step. 6. Publishing SCAD publishes the CCI on a quarterly basis. SCAD also publish annual CCI results and inflation rates. ‘The Construction Cost Index is available to all interested users after itis released, The CCI can also be provided on CDs upon request. 7. How to read the CCI ‘The CCI reflects the rate of the change in the prices of a range of specified building materials and ‘construction services between two time periods, the base period and the comparison period, For ‘example, if the CCI of the building materials and services basket during a specified base period is AED 100, and the CCI of the comparison period was 105.0, this means that prices of building materials and services increased by 5%. 8. Terms related to the CCI CesT Price is defined as the value of one unit of a material or service; this means the market value of the material or service. This value is established through the ‘exchange of materials and services in the markets and is equivalent to the benefit achieved by the user. Construction Cost The CCI is an index that measures the rate of change in construction costs during Index (CCI) two time periods, a base period and a comparison period for a fixed basket of certain building materials and construction services selected from the construction projects breakdown, Towers: medium Building construction of 15-20 stories commonly used in the Emirate of Abu Dhabi quality composed of medium-quality materials. Weight Weight is the relative importance of a material or service within the CC! basket compared with all other materials or services. Outlet Outlets where building materials or services are sold such as building materials ‘companies, factories, ... etc. Poriods of Periods of collection are the adopted periods to repeat the survey of all groups in collection each basket. The period might be weekly, semi-monthly, monthly or quarterly.9. Disclaimer White all care and diligence has been taken with the compilation of official statistics, the Statistics Centre — Abu Dhabi gives no warranty that the information, data or statistics, supplied are free of errors. SCAD shall not be liable for any loss or damage suffered by the user following the direct or indirect use of the statistics supplied in good faith by SCAD. Users of Official Statistics are responsible for determining when and how to use the statistics for specific purposes, 10. Next release ‘The CCI for Q4.2015 will be released on 15 March 2016, For more information on prices and other official statistics, please visit the SCAD website at: www.scad.aees Wate ee Dep Ese sie) er4| On, SAEs, rat. ee were a \s