The building cost index (BCI), compiled in January 2022, is 100.6 with a new base in December 2021 = 100. The index is 0.6% higher than in December 2021. The price of domestic materials increased by 1.2% and the price of imported materials increased as well by 0.2%. Cost of machinery, transport and energy consumption increased by 0.2%.
The Act on the Building Cost Index (42/1987) has been repealed and from 1 January 2022 the Act on Statistics Iceland and official statistics (163/2007) will govern the compilation of the BCI.
Two important methodological changes are introduced into the BCI along with this milestone:
- The compilation of labour cost will henceforth be based on The Icelandic wage survey (ISWEL), replacing union contract wage rates. The benefit of this new data source is the improved reactivity vis-a-vis actual labour costs in the construction sector, as the ISWEL survey measures current payments. Data on wages in January 2022 will become available in February 2022. Hence, the measure of the labour cost does not show change in the current compilation in January 2022.
- As of January 2022, prices of construction inputs are measured excluding value added tax (VAT), while until the end of 2021, prices were measured including the VAT. This change of method does not in itself have any effect on the BCI index as all prices in the month-to-month comparison exclude the VAT. Going forward, reimbursements of VAT payments for on-site construction work will, however, no longer affect the compilation of the BCI. New base and presentation of statistics
Primary changes which appear in the presentation of statistics in PX-tables on the website of Statistics Iceland:
- The building cost index will be published on a new base in December 2021=100. All previously published statistics for earlier bases will continue to be available and their time series extrapolated with changes measured on the new 2021 base.
- The breakdown for the building cost index will be published for the new base, from December 2021, as before. The breakdown for earlier bases will be discontinued but all already published statistics will be available in earlier tables.
- The building cost index, including sub-indices, will be published by month of measurement and compilation. Furthermore, publishing the BCI with respect to month of application has been discontinued as the legal requirement for such a publication is no longer present.
- A new table, “Price base for street construction fee”, will be replacing the table “Cubic- and square meter cost of the index house which was built in 1987”. The new table contains a projection of the previously published “square meter price”. Initially, this measure reflected the average building cost per square meter of a house built in 1987 using the prevailing technology of the era. Since the rebasing in 2010, this series has been extrapolated by changes of the rebased BCI. The same method will be used going forward.
- As new PX-tables will be renamed, users with direct links to tables by API or other means, will have to update their links. For example, previous table VIS03000.px becomes VIS13000.px.