Building cost index: documentation of statistics

The building cost index describes the cost development of professional (commercial) newbuilding. The index measures the cost development of building construction from the perspective of the constructor or contractor. The building cost index does not include all costs incurred by the constructor, such as planning and financing costs. Indices on professional renovation building are available only on residential building construction.

The building cost index does not cover all categories of the Classification of Buildings. Categories 02 Free-time residential buildings, 10 Energy supply buildings, 11 Public utility buildings, 13 Rescue service buildings, 14 Agricultural buildings and livestock shelters and 19 Other buildings are not taken into account in the official building cost index.

The statistical unit of the building cost index is a building cost that must be paid by the contractor in building construction. A typical reporting unit from which data are collected is such as different enterprises selling building materials for material costs, but Statistics Finland's other indices are used as data sources for measuring services and labour costs, for example.

The population of the building cost index comprises all production factors used in building construction. They are usually grouped into labour, materials and services.

The geographical reference area of the building cost index is the whole of Finland. The index does not give information about possible differences between different regions.

The oldest total indices of the building cost index derived from database tables are from 1922 onwards. Transfer price coefficients are published from 1949 onwards. Index clause sub-indices are available starting from 1980. The length of time series of indices by type of house depends on when the index in question was started to be produced.

The published index point figures of the building cost index are always final at the time of publication. After this, the figures are not changed apart from in exceptional circumstances.

The base year of the latest building cost index is 2025 (2025=100). Indices are also published in database tables for the base years 1951, 1964, 1973, 1980, 1990, 1995, 2000, 2005, 2010, 2015 and 2021. The indices of old base years are chained starting from the introduction of the new base year with changes in the index of the latest base year.

The data of the building cost index are published as index point figures. Monthly and annual change percentages are also calculated from the index point figures.

The reference period of the building cost index is a month. The price data are collected mainly as on the 15th day of the month.

The building cost index is published on the 15th day of the month following the reference month. If the day is on a weekend, the index is published on the previous weekday.

The main classification of the building cost index is the input nomenclature, which is Statistics Finland's own classification. At the top level of the nomenclature, the input headings can be classified into three main categories (cost types): labour, materials and services.

The building classification (2018) is used as the second classification in the building cost index. Of the types of buildings in the Classification of Buildings (intended use categories) four types of building projects have been formed for the building cost index:  detached and semi-detached house, block of flats, service building and industrial and warehouse building. The building cost index is calculated as the weighted average of four house project types.

The cost indices of building construction can be classified into two main categories according to the official Classification of Buildings: Cost indices of residential building construction and of other than residential building construction. The indices for residential building construction are detached and semi-detached house and block of flats. The project type detached and semi-detached house describes professional, producer-form construction of one-dwelling houses, two-dwelling houses and terraced houses. Indices of professional renovation building are also produced from residential building divided into dwelling repairs and building repairs.

The indices of other than residential building construction are the project types of service building and industrial and warehouse building. Service building represents the average project type of many different commercial, office, transport and communications, institutional care, assembly and educational buildings. The type of project idustrial and warehouse building represents different industrial and warehouse buildings in the index.

The compilation of statistics is guided by the Statistics Act. The Statistics Act contains provisions on collection of data, processing of data and the obligation to provide data. Besides the Statistics Act, the General Data Protection Regulation, the Data Protection Act and the Act on the Openness of Government Activities are applied to processing of data when producing statistics.

Statistics Finland compiles statistics in line with the EU’s regulations applicable to statistics, which steer the statistical agencies of all EU Member States.

Further information: Statistical legislation

The compilation of statistics is guided by the Statistics Act (280/2004). The Statistics Act contains provisions on collection of data, processing of data and the obligation to provide data. Besides the Statistics Act, the Data Protection Act and the Act on the Openness of Government Activities (621/1999) are applied to processing of data when producing statistics. 

Statistics Finland compiles statistics in line with the EU’s regulations applicable to statistics, which steer the statistical agencies of all EU Member States. Further information: Statistical legislation

The production and data content of the building cost index are guided by EU regulation 2019/2152 on European business statistics.

The indices of building cost index are provided monthly for the use of other statistics.

In addition, the data of the statistics are supplied monthly to Eurostat on the day of their publication and Eurostat releases the data on its web pages.

On average, approximately 280 staff-days are spent yearly on producing the building cost index. The labour input comprises the collection, processing, analysis and publication of data. No information is available on the response burden related to the survey (building cost index) used to collect the source data of the statistics.

The source data for the building cost index are price observations obtained from Statistics Finland's own data collection: Building cost index and Price inquiry on producer price indices for manufactured products and services as well as information from other price indices.

The data collection collects price data from producers of building materials and various wholesale and retail trade stores. The distribution route of the inquired products is taken into account in the weight structure of the building cost index. The same product is generally asked from different distribution channels in the supply chain and price changes collected from different sales locations are weighted with the distribution weights defined for each product. The following distribution routes are considered in the building cost index:

• Delivery from factory
• Hardware store (consumer)
• Wholesale firm
• Other

Data on the cost index of civil engineering works, the consumer price index, the producer price index for manufactured products and services are also used in the calculations. To measure labour costs, the index of wage and salary earnings is used, to which social costs updated once a year from employer organisations are combined.

The calculation of the building cost index is based on about 1,100 prices provided by approximately 270 data suppliers. Sales data obtained from hardware stores and wholesalers as well as web-scraped price data are also used. With these total data, significantly more observations can be obtained than if normal data collection methods were used.

The data obtained from hardware stores are only used in a limited number of product groups in addition to other distribution channels.

The data for the building cost index are mainly collected monthly. Some of the data are of such nature that they are updated only once a year.

The data inquired for the building cost index are mainly collected with a web questionnaire. A small share of the data are collected by email.

Data providers are requested on a monthly basis to report price data for the products selected for them and to indicate the reasons for significant price changes, as well as any changes in product characteristics (such as a change of brand or model).

The products included in the data collection should remain as unchanged as possible in terms of their characteristics over time (so-called quality standardisation). The products reported by the data providers should be described and specified as precisely as possible, for example by a brand or model, in order to ensure that the price data of the monitored products are comparable over time. Otherwise, the change in price may be erroneously attributed to a change in the quality or characteristics of the product.

The data of the building cost index are systematically validated. The calculation system puts price changes exceeding a certain threshold on the check list. In addition, missing observations or product changes reported by the data supplier are addressed. If necessary, the data supplier is contacted or missing data are estimated.

Changes in products can be treated in the calculation of the statistics by changing the price of the previous month so that the price paired comparison between two months is made for the same product standardised for quality.

Updated price data are obtained monthly for the products to be measured (so-called product manifestations). In the first stage of the index calculation, paired comparison of prices is made for product manifestations (current price/comparison price of the previous month). Once the price ratios formed in this way have been completed, price ratio aggregates are calculated for the products and later for product groups using the weighted geometric average formula. This way, the product group-specific level series, or elementary price indices on a chain basis, can also be calculated for the actual index calculation. After this, the actual indices are calculated from the elementary price indices of product groups according to the index hierarchy.

The building cost index is calculated in accordance with the Laspeyres index. The weights of the index are from the base period and they are kept fixed throughout the calculation period of the base year (around five years).

The total index of the building cost index is calculated as the weighted (geometric) average of four house project types. The weight of the house project type in the overall index is determined by the value of building production by building type derived from Statistics Finland's statistics on building and dwelling production.

A separate input distribution has been defined for each house type project. Inputs are measured with one or more products. The distribution routes previously presented are taken into account in weighting between products and product groups. The distribution routes of the product and their weights vary from one product to another, but factory suppliers, as well as installation and electrical supplier wholesalers are most significant as a whole.

The expert help of Forecon and several data sources have been used to define the input weights inside the project types. The Forecon report (only in Finnish) provides the background for the weight structure of the most recent base year 2025=100.

The building cost index is one inflation indicator in the construction industry. It is well suited for examining long-term cost development in building construction.

The building cost index is used to deflate inputs in national accounts and the indices of renovation building of residential building construction are used as source data in the consumer price index, for example.

The building cost index and its index-clause sub-indices (P2000=100) have been used as a compensation index for building projects. The revision indices currently used in contract agreements can, however, be freely agreed upon.

The building cost index is still used for the time being as a revision index in real estate taxation when updating the base value of the taxable values of buildings. Many insurance premiums are also tied to the building cost index.

A transfer price coefficient tied to changes in the building cost index is used in the maximum price calculations of government-subsidised dwellings. The building cost index can also be used in the maximum price calculations of price controlled HITAS dwellings.

Views on user satisfaction are collected through stakeholder cooperation and by receiving user feedback by email and telephone.

The building cost index is calculated using more than 1,000 price data items collected from approximately 270 data suppliers. The official building cost index describes the average national price development of the basic inputs in building construction. The index does not give information about possible differences between different regions. It is not suitable for measuring the output prices of construction either (so-called construction price index).

The data collection for the building cost index is based on a judicious sample of representative commodities selected for monthly price monitoring. Price changes in these goods are monitored on the pure price index principle, i.e. by eliminating the price change due to quality changes from observed price changes.

The accuracy of the building price index is affected by possible sampling error and data processing errors. The magnitude of the errors has not been estimated.

The correctness of the indices is also influenced by non-response, which in the building price index is between four and five per cent on monthly level. Efforts are made to reduce non-response by reminding respondents to supply the requested data.

There are no exhaustive register data for the drawing of the sample on the inputs used for building construction and the characteristics data required for it. Empirically, however, it is known that many different types of labour, materials and services are used as inputs in building construction production. The consequence of this is that a selection must be made of the key inputs to be monitored and the headings used for their measurement.

The selection is made judiciously, i.e. it is a question of judicious sampling (so-called sample). The skills of experts in the field of construction at the Technical Research Centre of Finland (VTT) has been used for a long time to select representative headings. Experts of Forecon have been used in the updating of the base year 2025=100.

Because there is a judicious sample in the statistics, estimating the sampling error is not relevant.

The basic objective in the building cost index is to monitor monthly changes in the price of building materials remaining unchanged in terms of quality and other definitions.

Price changes in commodities selected to price collection are monitored on the pure price index principle, i.e. by eliminating the price change due to quality changes from observed price changes. The building products included in the data collection should be described and specified as precisely as possible. Then the price data of the monitored products are temporally comparable. If comparable data cannot be collected for successive periods for a certain product or the production of the product or the quality in question ceases, the old product can be switched to a replacing product flexibly in statistics production.

The magnitude of the possible measurement error has not been estimated.

The non-response rate of the data collection for the building cost index is around four to five per cent on the monthly level. Efforts are made to reduce non-response by reminding respondents to supply the requested data.

Quality management requires comprehensive guidance of activities. The European Statistics Code of Practice forms the basis for the common quality system of the European Statistical System.

The Code of Practice is based on 16 principles that concern statistical authorities' independence, accountability and the quality of the processes and data to be published.

The principles are in line with the Fundamental Principles of Official Statistics approved by the United Nations Statistics Commission and are supplementary to them. The quality criteria of Official Statistics of Finland are compatible with the European Statistics Code of Practice.

Further information: European Statistics Code of Practice | Statistics Finland and Recommendations of the Advisory Board of Official Statistics of Finland | Statistics Finland

The quality of the building cost index is evaluated in several stages of the statistical process. The number of respondents to the data collection and the non-response rate are monitored in production and reminders are sent for missing responses. The correctness of the biggest price changes is checked.

Revisions – i.e. improvements in the accuracy of statistical data already published – are a normal feature of statistical production and result in improved quality of statistics. The principle is that statistical data are based on the best available data and information concerning the statistical phenomenon. On the other hand, the revisions are communicated as transparently as possible in advance. Advance communication ensures that the users can prepare for the data revisions.

The reason why data in statistical releases become revised is often caused by the data becoming supplemented. Then the new, revised statistical figure is based on a wider information basis and describes the phenomenon more accurately than before.

Revisions of statistical data may also be caused by the calculation method used, such as annual benchmarking or updating of weight structures. Changes of base years and used classifications may also cause revisions to data.

The data of the building cost index is not revised (except only in error situations).

The price data are collected mainly on the 15th day of the month.

The building cost index is published on the 15th day of the month following the reference month. If the day is on a weekend, the index is published on the previous weekday.

The data of the building cost index are published precisely on the days indicated in the release calendar.

The price concepts and cost types of the building cost index comply with the European Regulation 2019/2152, so the data of the statistics are partly internationally comparable.

However, Statistics Finland also publishes more comprehensive data from the building cost index than required by the EU Regulation. For example, there are more building types than the international minimum level. In addition, renovation indices, index clause sub-indices and transfer price coefficients of residential building construction are published for national needs, so there may not necessarily be an international reference point for them.

The time series of the building cost index are comparable. In connection with the base year revision, the calculation of old indices with their own weight structure is discontinued and the calculation is continued by chaining. The old indices are always calculated with the weight structure of the newest index and based on the latest cost data.

Long time series are published on the building cost index. The oldest overall index 1935=100 published in database tables is from 1922 onwards (annual data only).

The closest equivalent to the building cost index is the cost index of civil engineering works, which describes the development of costs for a civil engineering entrepreneur. The building cost index describes the development of the costs incurred by a building contractor in the field of building construction.

The monthly and annual data of the building cost index are based on the same source data and the same calculation method. Annual data are formed as averages of monthly data. Data published for different reference periods are thus consistent with each other.

Statistics Finland publishes new statistical data at 8 am on weekdays in its web service. The release times of statistics are given in advance in the release calendar available in the web service. The data become public after they have been updated in the web service.

Further information: Publication principles for statistics at Statistics Finland

Statistics Finland's release calendar: Future releases 

Future publications of the statistics can be found on the page of the statistics at: Future releases of the statistics

The data are released to all users at the same time. Statistical data may be processed at Statistics Finland and information on them may be given before release only by persons involved in the production of the statistics concerned or who need the data of the statistics concerned in their own work before the data are published.

Further information: Publication principles for statistics

Unless otherwise specifically stated in connection with the product, data or service concerned, Statistics Finland is the producer and copyright owner of the data. The terms of use for statistical data.

The data of the statistics are published monthly on Statistics Finland's website.

The release is published monthly on the home page of the statistics.

The database tables of the statistics can be found in Statistics Finland's StatFin database. Long time series on old total indices, indices by type of building and cost type as well as index clause sub-indices and transfer price coefficients are available.

Tables removed from the production of the statistics can be found in the archive database.

Unit-level data of the building cost index are used only for the production of the statistics. No others than the producers of the statistics have access to unit-level material.

The User’s Handbook for Building Cost Index 2000=100 describes different building cost indices and their calculation methods and provides guidance in their use. The Forecon report (only in Finnish) provides the background for the formation of the weight structure of the most recent base year 2025=100. 

The weights of the most recent base year are available as PDF files:

• Input indices 2025=100
• Building cost index 2025=100 by type of building
• Residential building 2025=100

The VTT Building Technology’s publication (only in Finnish) relating to the Building Cost Index 2000=100 has also been published on the methodological descriptions page of the statistics (in Finnish).

The data protection of data collected for statistical purposes is guaranteed. The compilation of statistics is guided by the Statistics Act. Alongside the Statistics Act, the EU’s General Data Protection Regulation and the Finnish Data Protection Act are applied to the processing of personal data. Provisions on the confidentiality of data collected for statistical purposes are laid down in the Act on the Openness of Government Activities.

The data are processed only by persons who need the data in their work. The use of data is restricted by usage rights. All persons employed by Statistics Finland have signed a pledge of secrecy, where they have obliged to keep secret the data prescribed as confidential by virtue of the Statistics Act or the Act on the Openness of Government Activities.

Further information: Data protection | Statistics Finland (stat.fi)

The data of the building cost index can be handled only by persons involved in the production of the statistics. Enterprises acting as data providers or products’ price data are not published, but the published data are always aggregated index point figures comprised of several observations.

The data are processed in accordance with the Statistics Act and Statistics Finland's data protection and data security guidelines. The aim of statistical confidentiality is to prevent direct or indirect identification of data concerning an individual enterprise from the published data.

The principles of statistical confidentiality are applied in the statistics, according to which data relating to individual enterprises are protected, where necessary, prior to publication. For this, Statistics Finland uses internal guidelines for the protection of tabulated business data.