U.S. Department of Commerce

Economics and Statistics Administration

BUREAU OF THE CENSUS

October 28, 1997

Data Users’

Conference

Statistics

Construction
October 28, 1997

Data Users’

Conference

Statistics

Construction

Issued March 1999

Department of Commerce

William M. Daley, Secretary

Robert L. Mallett, Deputy Secretary

Economics and Statistics Administration

Robert J. Shapiro, Under Secretary for Economic Affairs

BUREAU OF THE CENSUS

Kenneth Prewitt, Director
BUREAU OF THE CENSUS

Kenneth Prewitt, Director

Bradford R. Huther, Deputy Director

Paula J. Schneider, Principal Associate

Director for Programs

Frederick T. Knickerbocker, Associate

Director for Economic Programs

Thomas L. Mesenbourg, Assistant Director

for Economic Programs

MANUFACTURING AND CONSTRUCTION

DIVISION

William G. Bostic Jr., Chief

ECONOMICS

AND STATISTICS

ADMINISTRATION

Economics and Statistics

Administration

Robert J. Shapiro, Under Secretary

for Economic Affairs
Page

Preface............................................................................................. iv

Introduction ....................................................................................... v

Section 1. Summary of Sessions

New Residential Construction .................................................................. 3

Expenditures for Residential Improvements and Repairs..................................... 7

Value Put in Place Program .................................................................... 11

Economic Census: Construction Sector ....................................................... 15

Section 2. Overview of Construction Statistics Programs

Construction Statistics Program ................................................................ 21

Brief Summary of Programs .................................................................... 23

Description of Individual Programs .......................................................... 23

Summary Display of Construction Statistics Programs ..................................... 24

Program Details ................................................................................. 27

Building Permits Program .................................................................... 27

The Survey of Construction .................................................................. 28

Value Put in Place Program.................................................................. 32

Manufactured (Mobile) Home Program...................................................... 36

Economic Census: Construction Sector .................................................... 37

Construction Price Indexes................................................................... 37

Figures

1. Construction Statistics Programs .............................................................. 25

2. Survey of Construction and Related Activities ................................................ 31

3. Summary of Value Put in Place Program ..................................................... 33

Appendixes

A. Conference Agenda ............................................................................ A-1

B. Registered Participants......................................................................... B-1

C. Census Bureau Contacts ...................................................................... C-1

iii

Contents

U.S. Census Bureau
Preface

The Census Bureau’s construction statistics program

commenced more than 30 years ago. In the years since

then, the Bureau has tried to keep the program’s statistics

sound and relevant by introducing specific improvements.

Still, the program has not undergone an extensive review

by a wide range of users during this whole period. The fall

1997 Construction Statistics Data Users’ Conference represented the Bureau’s attempt to remedy this oversight.

To conduct the review, the Bureau turned to data users

for critique and guidance. After all, the proof of the pudding

lies not in whether the cook thinks the recipe was followed

scrupulously but in whether those served found the pudding suitable to their taste.

The format of the conference was perfectly straightforward. We asked a good sized group of highly knowledgeable and expert users of our construction statistics three

questions:

• What are we doing right and what are we doing wrong?

• What data are we providing that you find useful and that

you find of little use?

• What should we be doing differently?

The answers were many. Some were edged. Some

were provocative. All were useful. They made plain that

there is a large, active, insightful user community that

recognizes the common interest in better and more complete construction industry statistics. Users’ suggestions

and the Bureau’s responses occupy the pages that follow.

The views of the users define a work agenda that the

Bureau will try to pursue over the coming years. I say, try to

pursue because the abundance of worthwhile suggestions

for improving construction statistics will almost certainly

outrun the Bureau’s resources to implement the suggestions. Even statistical agencies must make tradeoffs among

opportunities, all of them good.

Still, the counsel of the data users will help the Bureau

make wiser choices than we might otherwise make. The

conference participants deserve our sincere thanks for

that. We give special thanks to our lead discussants:

Michael Carliner, Kermit Baker, Robert Parker, and Manuel

Gutierrez. Each delivered a thoughtful and stimulating

introduction to his session and provided an excellent

jumping-off point for fruitful discussion.

Frederick T. Knickerbocker,

Associate Director for Economic Programs

iv

U.S. Census Bureau
Introduction

The construction industry is continually undergoing change

and it is important that the Census Bureau provide users of

construction statistics a forum to discuss our programs and

their needs as well as an opportunity to offer suggestions

for change. In this spirit, the Census Bureau sponsored a

Construction Statistics Data Users’ Conference, held on

October 28, 1997, at the Embassy Suites Hotel in Washington, DC.

The goal of this conference was to generate suggestions

for improving Census Bureau statistics on the construction

sector of the economy. The participants included statisticians and economists representing trade associations,

government offices with diverse data needs, academia,

trade unions, and industry. Participants discussed a broad

variety of perspectives and priorities, and topics included

new data items to collect, alternative data products, methodology issues, and product delivery options.

The conference was organized into four sessions corresponding to the four major areas of Census Bureau

construction statistics: New Residential Construction, Expenditures for Residential Improvements and Repairs, Value

Put in Place Program, and the Economic Census: Construction Sector. For each session, a lead discussant

introduced the topic, described various highlights of our

program, and discussed unmet data needs and needed

improvements in data we are currently providing. The

presentation by lead discussants was followed by a floor

discussion during which attendees had an opportunity to

follow up on issues already raised and to introduce

new topics. The conference agenda is included in Appendix

A and a list of registered participants is included in Appendix B.

In the first section of this report, we provide summaries

of each of the conference’s four sessions, including a brief

background on the subject, a summary of the lead discussant’s presentation and floor discussion, and Census Bureau

comments and responses.

In the second section, we present an overview of the

Construction Statistics Programs at the Census Bureau,

describing our major surveys and related data collection

activities, and we show the relationship between these

activities. Of particular interest are the flowcharts which

help trace out these relationships. Even though the overview was prepared for this conference, it can serve as an

independent document providing an integrated description

of our programs.

For those wishing more detail on any of the surveys

discussed in the overview, we recommend the technical

appendixes in the reports for each of the individual programs. They provide detailed information on methodology,

definitions, data limitations, and a wealth of other survey

specific features. In Appendix C, we provide the name,

telephone number, and E-mail address of a contact person

for each program as a source of more information.

We are gratified by the interest in our programs and the

participation in each session. Many issues raised during

the individual sessions were addressed by Census staff

during the floor discussions. In the sections entitled Census Bureau Comments and Responses, we attempt to

address important issues not adequately covered in the

discussions. We appreciate the many comments and recommendations offered and we apologize if any relevant

remarks have been omitted from our summaries.

One recommendation that arose in each session focused

on the need for more cooperation among government

agencies and between government agencies and the private sector. We heartily agree and in the individual sessions have indicated some of the cooperative work now

under way. We are seeking more cooperative efforts with

the private sector and other agencies to take advantage of

external expertise and to increase consistency of our

programs.

We are interested in hearing your needs and suggestions. Please use the Census Bureau contacts in Appendix

C to provide feedback on our programs and products. Our

Internet site, www.census.gov/conconf97, contains this document and paper copies are available from the Forms,

Publications, and Customer Services Branch at 301-457-

4769 or at mendel.d.gayle@census.gov.

v

U.S. Census Bureau
Summary of Sessions

Section 1
New Residential Construction

LEAD DISCUSSANT

Mr. Michael S. Carliner

Staff Vice President

National Association of Home Builders

1201 15th Street, N.W.

Washington, DC 20005-2800

BACKGROUND

The Building Permits Survey (BPS) collects information

on building permits issued for private residential construction. Information is collected from permit-issuing jurisdictions on number of permits issued, permit value, and

number of units in new construction. Data are collected

monthly from a sample of permit-issuing places and annually from the remaining permit-issuing places. Monthly

estimates of Housing Units Authorized for the U.S. is a

leading economic indicator. The Survey of Construction

(SOC), which is sponsored in part by the Department of

Housing and Urban Development, collects and releases

information on residential units started, sold, and completed each month. Every month field interviewers collect

information directly from permit offices and builders. In

addition to the monthly information, a variety of housing

characteristics, such as unit price, number of bathrooms in

unit, and size of unit, are released quarterly and annually.

LEAD DISCUSSANT

Mr. Carliner began by speaking very highly of the

construction data series released by the Census Bureau

and he had special praise for the new home authorizations

series which he referred to as a premier data series in

terms of precision, timeliness, geographic detail, and

relevance. He also commented on the cooperativeness

and responsiveness of Census staff working on construction programs.

He described the National Association of Home Builders

(NAHB) as a retailer of construction data, supplying information to its members and to other interested parties. This

information is often based on statistics produced by the

Census Bureau. He observed that NAHB members use

Census data in business planning to decide on product

mix, evaluate inventory, determine places to open new

sales offices, and address a variety of other business

issues. He acknowledged the importance of this data to

government planners and to Federal offices, but cautioned

that we should not lose sight of the broad utility of our data

and should not focus our attention only on other government users. He observed that we should be more sensitive

to the needs of state and local government users in

designing our data products.

He discussed general areas in which he saw the need

for more attention on the part of the Bureau. He sees the

need for greater comparability in data released: comparability in time, over geographic areas and with other series.

He also remarked that the Bureau can make better use of

data already collected to make our products more valuable.

For example, if the Bureau would develop local models for

time between permit and start, then users could better use

permit data to model starts from permits at the local level.

If the Bureau were to collect permit value in SOC, then one

could model a relationship between permit value and sales

price which users could utilize with the extensive geographic detail of the permit series. He also suggested we

do more to reconcile information between the SOC and the

census of construction industries.

He asked that we provide more information about the

methods we employ and their impact on our estimates. For

example, he observed that in the SOC we occasionally

reclassify housing units to be different from their classification in the BPS. When we do so, we typically reclassify

multifamily houses (from BPS) to single family (in SOC).

Accordingly, we produce higher estimates of new singlefamily construction in SOC than in the BPS. He feels that a

more extensive discussion of this process should be readily

available.

Mr. Carliner also recommended that we prepare annual

revisions to our published monthly estimates when more

complete information is available and he further suggested

that we release more of our data on the Internet and make

it available in spreadsheet format so that it could be

downloaded directly.

Mr. Carliner ended his remarks with a list of specific

requests. He suggested that we:

• Collect and publish housing characteristics at time of

start

• Obtain better information about type of financing

• Provide housing characteristics broken out by type of

financing

• Estimate starts on a state and/or metropolitan area basis

3

U.S. Census Bureau
• Publish county estimates for permits

• Publish manufactured (mobile) homes information by

metropolitan/nonmetropolitan

• Record and utilize information about canceled sales

FLOOR DISCUSSION

There was wide agreement that data from the Building

Permits Survey (BPS) are of excellent quality, detail, and

timeliness. There were requests to resume collecting

permit information on nonresidential construction and on

improvements. These data were recently dropped from the

survey as a cost-saving measure. One user commented

that the BPS sample might be cut in order to direct more

resources elsewhere. Others were opposed to this suggestion because they did not want to reduce the very high

quality of BPS estimates.

There was a lengthy discussion on the usefulness of the

completions data. Some users did not find it useful while

others did. One user suggested that we reduce the number

of single-family housing units in the SOC sample followed

to completion. Others did not agree. It was noted that we

collect more complete information about characteristics

after completion than at any earlier stage and reducing the

number of cases followed to completion would have an

adverse effect on characteristic estimates.

There was also a suggestion to reduce the number of

cases followed to completion for multifamily units. It was

noted that doing so will have an adverse effect on multifamily absorption estimates produced from the Survey of

Market Absorption. There were requests for more detailed

information on multifamily housing, such as number of

units constructed for senior housing, as well as information

about other specialized uses of multifamily structures.

There were requests for more detailed geographic information from SOC. Several users said that regional estimates were not very useful and suggested that they be

discontinued. It was observed that housing and demographic statistics from other programs are released by

region and by having regional information for construction

statistics allowed for analysis and comparability across

programs. There was a consensus that regional information should not be discontinued unless they were replaced

with estimates at a lower level, such as Census division or

state.

Another topic discussed was the utility of the house

value as recorded on the building permit. The permit value

of a house may not reflect what the house would sell for

and is not comparably reported across geographic areas.

One user observed that even though there is little utility

across areas, for specific geographic areas the permit

value of a house is useful for tracking change over time. A

suggestion was made to add the permit value of a house to

all single-family houses in the SOC and to publish this

information. Doing so would enable data users to model

sales price from the permit value of a house and thus be

able to estimate sales price at the levels of geography in

the BPS.

The Census Bureau raised the issue of delaying the

publication of preliminary sales estimates. Noting that a

sale under SOC is a contract signing rather than a closing,

we discussed the problem in deriving preliminary estimates

because of contract signings prior to the issuance of a

permit. Sales estimates sometimes have large revisions,

due in part to sales before a permit is issued. Census staff

expressed the concern that releasing early estimates (which

are subject to significant revisions) may not be a service to

the user community. There was strong opposition to delaying preliminary sales estimates. Attendees noted that they

understand that preliminary estimates are revised and they

urged us to continue providing statistical information that

indicates the precision of the estimates and the limitations

of the data.

The Bureau raised the issue of unauthorized construction in permit-issuing jurisdictions. The Census Bureau

currently inflates estimates of single-family starts, sales

and completions by 3.3 percent to account for unauthorized (illegal) new home construction in permit-issuing

areas. We believe that unauthorized building in permitissuing areas is at a much lower level and we propose

eliminating the 3.3 percent adjustment factor.

Attendees agreed that there was little unauthorized new

home construction in permit-issuing areas and that the 3.3

percent factor is not warranted. There was concern that in

removing the factor from our estimates we would introduce

a discontinuity in our series. Attendees requested that any

actions to remove the 3.3 percent factor be done in a

manner to minimize the discontinuity in the starts, sales,

and completions series. In particular, they suggested that

reductions in that adjustment factor be introduced gradually over time or that adjustments be carried back as a

revision to avoid sudden breaks in series.

CENSUS BUREAU COMMENTS AND

RESPONSES

We would like to take this opportunity to describe recent

and ongoing activities for the SOC. One of the recent major

improvements has been the introduction of data collection

using laptop computers. The conversion to Computer

Assisted Personal Interviews (CAPI) has given us greater

control on the data collection activities and the ability to

process data more quickly. Along with the introduction of

CAPI, we have instituted a recheck operation (verification

of a sample of interviewer data) as a quality control activity.

We will move to a new processing system in the year 2000

and are using the opportunity to introduce changes in

survey processing and products. We have revamped the

monthly and quarterly report series to make the format

more consistent across reports and to make them easier to

U.S. Census Bureau

4
use. We are investigating a proposal to eliminate the C21

report—New Residential Construction in Selected Metropolitan Areas—because we believe the utility of this report

does not justify the resources to produce it. We will be

eliminating the 3.3 percent upward adjustment to estimates

of starts, sales, and completions which compensated for

unauthorized new home construction in permit-issuing

areas in the past. There is very little evidence of significant

unauthorized new home construction in permit-issuing

areas at present. We plan to introduce annual revisions to

all data series starting with data year 1999. Based on more

accurate information, we will revise all monthly estimates

for the year 2000 in May of 2001.

We agree with Mr. Carliner’s comments on the need for

greater comparability in estimates and improved data

accessibility. We added a question on the 1997 Economic

Census, Construction Sector about residential starts in an

effort to investigate comparability in data collection between

these programs. We are conducting an analysis of data

collected in the Value Put in Place (VIP) program with data

collected in the Census Bureau’s Annual Capital Expenditure Survey (ACES). (In fact, we use ACES data to

benchmark VIP estimates of new industrial construction.)

This past summer we conducted an extensive comparison

of C50 estimates of residential improvements and repair

expenditures with remodeling estimates from the American

Housing Survey.

We currently release a large amount of data in electronic

format. Historic data for building permits, housing starts,

new home completions, new home sales, and housing

characteristics are all available on the Internet in spreadsheet format. In addition, the press releases for the above

series are also in spreadsheet format. Our more detailed

statistics, such as building permits by state, MSA, and

individual permit office are available in ASCII comma

delimited files for purchase. These can be imported to

spreadsheets or databases.

We provide microdata files from the SOC which include

all information we collect for new single-family houses in

our sample. Household records are coded to Census

Division which will allow smaller area estimation than our

published estimates. This file can be employed to obtain

cross-classified detail breakouts beyond estimates released

by the Census.

Mr. Carliner observed that we should not neglect the

needs of the private sector in designing our data releases.

We are very mindful that our data are valuable well beyond

the government sector and we continue to work with a wide

range of users in trade associations, businesses, and

economic planners to meet their needs. To the extent that

our basic programs are funded by government agencies to

meet their data needs, these needs will continue to be a

primary program responsibility.

He also urged that we take care to provide information

on our methods and procedures. We do provide a considerable amount of information about our methods, assumptions, and data quality as technical notes in our publication.

These address the needs of most users. For those who

want more information on specific topics, we gladly provide

internal memorandum or other documentation and willingly

meet with them to detail our activities.

Mr. Carliner listed about ten areas in which he would like

to see us produce estimates and conduct more analysis.

We appreciate his suggestions and do see how the analysis and models he is suggesting will provide more information from the data we already collect and process. In

evaluating the merits of his proposals, we will consider the

expected quality of estimates and how widely they will be

used in determining whether resources and opportunity

costs in producing them justify the benefits.

There was a suggestion during the floor discussion for

cutting the BPS sample as a money-saving measure,

however, there was a strong consensus against doing so.

The BPS estimates are among the finest produced by the

Census and we are not eager to reduce their quality. Not

only do permit estimates have very low relative standard

errors, they provide small area information monthly and we

conduct an annual census of all permit-issuing areas in the

Nation. Since building permit information is based on public

documents, there are no confidentiality limitations on making this information broadly available.

In addition to the wide public use of permit information,

data from BPS also are used in other construction statistics

programs. We ratio adjust information collected in SOC to

permit estimates to obtain more precise estimates of starts,

sales, and completions and since new home starts and

sales information is used in the VIP program, the permit

estimates have an impact for that program as well. Furthermore, permit information is used by the Census Bureau’s

demographic area to develop intercensal household estimates and to augment samples for ongoing survey programs.

In response to a question raised by Census staff as to

the utility of estimates of permit value for new single-family

construction in the BPS, attendees noted that estimates of

house value from permits are of value, especially for

measuring change over time. Based on these comments,

we will continue to collect and publish permit value. Census

staff also raised the question as to whether we should

eliminate preliminary estimates because they are often

subject to large revisions, especially new home sales.

Attendees expressed the opinion that preliminary estimates are valuable to them, even though they are later

revised, and suggested there be no changes in policy.

Based on these comments, we will continue to release

preliminary estimates.

U.S. Census Bureau

5
Expenditures for Residential Improvements and Repairs

LEAD DISCUSSANT

Dr. Kermit Baker

Director, Remodeling Futures Program

Joint Center for Housing Studies

Harvard University

79 John F. Kennedy Street

Cambridge, MA 02138

BACKGROUND

An important component of the Census Bureau’s Construction Value Put in Place (VIP) program are the estimates for expenditures for residential improvements and

repairs. These estimates are released in the C50 report—

Expenditures for Residential Improvements and Repairs—

and are based on the sample selected for the Consumer

Expenditure Survey (CES). We derive estimates for owneroccupied units directly from information collected quarterly

on the CES. Owners of vacant units, rental units and

vacation homes in the CES sample are mailed a questionnaire from the Survey of Residential Alterations and Repairs

(SORAR), through which we collect improvement and

repair information corresponding to information from the

CES.

Information on residential improvements and repairs

also is collected in the American Housing Survey (AHS).

The AHS is conducted by the Census Bureau every 2 years

and is sponsored by the Department of Housing and Urban

Development (HUD). Prior to 1996, Census collected information on residential improvements in the Building Permits

Survey, however, that data collection ceased in 1996

because of budget constraints.

LEAD DISCUSSANT

Dr. Baker began his discussion by observing that expenditures for improvements and repairs represent a major

component of all construction spending and are a significant contributor to the gross domestic product. As such,

there should be better coverage of activities in this area

and expenditures should be measured more completely

and in greater detail than is currently the case. He is

concerned that C50 estimates of residential expenditures

for improvements and repairs may be low and that belief is

supported by observing that C50 estimates are lower than

those derived from the AHS. Taking a broad view, Dr. Baker

proceeded to discuss five areas in which there needs to be

more work to improve our estimates and data utility, which

he characterized as benchmarking, composition, tracking,

geography, and seasonality.

Dr. Baker observed that he believes we underestimate

the level of activity in the C50, in part, because we

systematically miss some sources of expenditures for

residential improvements and repairs. In particular, he

observed that we are missing expense information on

buildings that convert from nonresidential to residential

use.

He observed that because the sample for the CES is

fairly small and not designed specifically for improvements

and repairs information, we have large weights which add

variability to our estimates. In addition, the Bureau introduces a downward bias in estimates because large expenditures when combined with large weights are viewed as

outlier observations, and their contribution to estimates is

systematically diminished by reducing the weights.

He observed that the AHS recently started asking for

more project detail and when homeowners are prodded for

detail, the level of expenditures increases. He suggested

that pressing for details improves homeowners’ recall and

recommended that we do more to prompt respondents for

more complete information on the CES.

Dr. Baker would like to see more detailed breakouts of

information in our reports. For example, large projects,

such as totally remodeling a kitchen, are in the same

categories as small projects, such as installing a new

faucet in a sink. (Both are under kitchen improvements in

the C50.) In addition, different types of households are

grouped together. He would like to see information broken

out by type of household.

Dr. Baker discussed the need to place an expenditure in

the actual month in which it occurred. He also observed

that estimates are often not available until 6 or 9 months

after the reference period. Improvements in monthly allocations and timeliness will allow users to better measure

trends and detect changes in improvement and repair

activity. Given the way in which we collect the information

for our improvement and repair estimates, he did not see a

solution to this problem.

Dr. Baker observed that data users would like more

detailed geography. He feels it is difficult to do meaningful

analysis with just data from the four Census regions and

7

U.S. Census Bureau
noted that information on improvements from the Buildings

Permits Survey was valuable because it was timely and

had small area information which could be used to track

local trends.

Dr. Baker said that the current estimates of improvement

and repair activity do a poor job tracking seasonality. One

problem is that the variability of our quarterly estimates

obscures seasonality. Contractors would like to have a

better understanding of the seasonality of improvement

and repair activity so they can better plan for labor demands.

After raising these issues, Dr. Baker asked where we go

from here. He observed that completeness and detail are

hard to achieve along with rapid data collection and

dissemination. He raised the question of whether a singledata collection instrument can meet all current needs.

Dr. Baker discussed the potential of more cooperative

efforts among Federal agencies as well as between Federal agencies and the private sector. In particular, he noted

the interest in improvement and repair statistics on the part

of HUD and asked if HUD and Census can better coordinate efforts to produce estimates of residential improvements and repairs. He also mentioned the monthly homeowner study conducted by the National Association of

Home Builders (NAHB) and asked whether a joint effort

between Census and the NAHB could be profitable. He

noted that the Joint Center for Housing Studies at Harvard

is working with members of the remodeling industry in

efforts to estimate improvement and repair activity and they

too would be glad to cooperate with Census in a joint effort.

Dr. Baker concluded his remarks by asking if Census

could make more microdata files on residential improvements and repairs available to the public.

FLOOR DISCUSSION

The Census Bureau recently stopped collecting information on authorizations for residential improvements on the

Building Permits Survey (BPS). It was observed that estimates for residential improvements from permits were

quite different from estimates in the C50. For one thing,

many individuals (and contractors as well) often do not get

permits for remodeling jobs. In addition, there is little

comparability in permit information across geographic areas.

It was observed that within a single permit-issuing jurisdiction, monthly information on permit value for remodeling

was an indicator of movement in the industry and the local

information was valuable.

A number of attendees expressed the belief that estimates in the C50 are low. Several made the observation

that the CES was not designed to collect information on

residential improvements and repairs and that is a source

of many of the problems.

It was observed that the SORAR and CES have small

sample sizes (for the purpose of estimating improvement

and repair expenditures), which results in high variability

for estimates of value, as well as for estimates of period to

period change. One attendee observed that difficulties

notwithstanding, it is important to attempt to measure

trends and to develop seasonal information. Large sampling weights also lead to large outliers which, when

removed from our quarterly estimates, cause a downward

bias. One person recommended we do an annual adjustment to add back the total value removed.

Estimates of residential improvements and repairs derived

from the AHS are higher than those published in the C50

and there was a suggestion that we compare programs

and try to understand why there are differences. The

different manners in which these two surveys are conducted and the way questions are asked may account for

some differences in estimates. For example, the AHS asks

respondents about expenditures over a 2-year period and

there may be telescoping of information into that period

from an earlier time frame. The CES asks about activity

over a 3-month period which may introduce recall problems

of a different nature. It was noted that the AHS is currently

undergoing a review of methodology which may present an

opportunity for increasing comparability between these two

surveys. Unfortunately, aside from these two programs,

there is little reliable information available regarding expenditures for residential improvements and repairs to allow for

additional comparisons.

A discussant from the Bureau of Economic Analysis

observed that by examining the input/output tables one can

see that the residential improvement and repair estimates

are low. That is, there is more manufacturing output of

products that typically go into residential improvement and

repairs than is reflected in the residential improvement and

repair estimates. He also observed that more recently the

match has been closer. One attendee noted that production estimates of building products from the Vinyl Siding

Institute agree quite well with estimates from the C50.

Another attendee stated that movements of building materials do not track well with corresponding movements in

improvement and repair expenditures.

A periodic survey of remodelers or other construction

firms to ask them to report on the amount of work done in

residential improvement and repairs was proposed. Most

attendees felt that such an approach is not realistic as it

would be very difficult to obtain cooperation. Furthermore,

such a survey would not capture do-it-yourself projects.

Despite problems with AHS and CES estimates, attendees agreed that a household survey is the best way to

collect information about residential improvements and

repairs. The survey requires a sufficiently large sample size

to avoid large weights and problems that arise from them.

The suggestion was made to employ the American Community Survey (to be instituted by the Census Bureau in the

future) to collect information on residential improvements

and repairs.

There was some discussion of the level of detail provided in the C50 and one discussant suggested that we

break out information in the C50 report by rental and

vacant.

U.S. Census Bureau

8
CENSUS BUREAU COMMENTS AND

RESPONSES

One of the primary concerns voiced in this session was

that the C50 estimates appear low and we at Census are

working on several fronts to evaluate them and introduce

program improvements. One should note that there are

remodeling expenditures that we do not include in our

estimates. For example, we do not include refrigerators

(when costing out a kitchen remodeling job) and we do not

include carpeting (when costing out a remodeling job in

other areas of a house). Furthermore, we only include the

cost of material for a do-it-yourself activity (in contrast to all

costs, including labor, when the job is done by a contractor). These expenses are omitted by design and the

program documentation makes this clear.

Since the CES is a household-based survey, nonresidential structures would never be subject to the questionnaire, and accordingly, expenditures for a nonresidential

building in the process of converting to a residential

structure would not be captured. This is a gap in our data

collection and we are investigating options for addressing

this problem. We do not know of other residential improvement and repair data systematically missing from our

estimates.

We remove outliers from collected data when preparing

estimates to reduce quarter-to-quarter variability and doing

so is a source of downward bias in our estimates. We are

reviewing our outlier procedures and investigating alternative methods to avoid introducing a downward bias. We

also are reviewing all our imputation procedures, which

compensate for nonresponse. We anticipate that through

the introduction of new procedures in both these areas, our

estimates of expenditures for residential improvements

and repairs will increase and we plan to revise historical

estimates reflecting this.

We have been working with staff in Housing and Household Economic Statistics Division who are responsible for

the American Housing Survey (AHS) to increase comparability between programs and to evaluate and account for

differences in estimates. They have redefined some data

categories to encourage comparability between programs

and have introduced a more extensive bounding procedure

in the AHS to prevent expenses in earlier periods from

being included in estimates for the current period. We plan

to continue working in this area and we will report on our

findings.

Employing disclosure avoidance measures similar to

those employed for the CES and other household surveys,

we have recently created and made available a microdata

file of expenditures based on housing units from the Survey

of Residential Alterations and Repairs (SORAR). Doing so

provides researchers the opportunity to conduct a variety

of analyses at various aggregation levels. We are currently

investigating the possibility of creating a comparable microdata file for the CES contribution to our estimate, which

consists of expenditures for owner-occupied units.

We agree with the consensus that the best way to collect

expenditures for residential improvements and repairs is

through a household survey. However, being dependent on

the CES for reasons of economy requires that our sample

be rather small for the purpose of collecting residential

improvement and repair information. Two of the C50s

major limitations—the high variability of estimates and the

inability to produce estimates at subnational levels—

are a consequence of this design. In addition, the timing of

the CES data availability prevents a more timely release of

our estimates.

U.S. Census Bureau

9
Value Put in Place Program

LEAD DISCUSSANT

Mr. Robert P. Parker

Chief Statistician

Bureau of Economic Analysis

U.S. Department of Commerce

Washington, DC 20230

BACKGROUND

The Value Put in Place Program (VIP) publishes estimates of the value of all construction work performed each

month in the United States. Information is gathered from a

variety of sources including a family of direct mail surveys

collectively referred to as the Construction Progress Reporting Surveys (CPRS). The value of construction work for

private nonresidential construction and for state and local

government construction are collected through the CPRS

using a frame of construction projects compiled by the F.W.

Dodge company. The value of construction work performed

for single-family houses is derived from Survey of Construction (SOC) data and value of construction work for

multifamily units is collected from builders through the

CPRS.

Concerning other components of VIP, information on

nonresidential farm construction is provided by the Department of Agriculture; information on federal construction is

provided by a variety of Federal agencies; and information

on public utilities is provided by regulatory agencies and

private sources. Residential improvements and repairs

data for owner-occupied units are collected in the Consumer Expenditure Survey (CES), and information on

residential improvements and repairs for all other units is

collected in a followup to the CES. Estimates of VIP are

adjusted to remove the affects of inflation using various

price and cost indexes—each appropriate to the type of

construction under review. Indexes for residential construction are calculated by the Census Bureau and the others

are obtained from private and federal sources.

LEAD DISCUSSANT

Mr. Parker began his discussion by explaining that the

Bureau of Economic Analysis (BEA) uses the VIP estimates as the basic source data to prepare estimates of the

structures component of the gross domestic product (GDP).

The VIP estimates also are used to estimate the output of

the construction industry in the input-output tables, which

provide the benchmarks for GDP, and also for estimates of

gross product originating and for gross state product. In

developing these measures, staff in BEA augment information from the VIP program with information from the Building Permits Survey and regulatory reports.

Mr. Parker stated that one of the major weaknesses in

their structures estimates, which are prepared quarterly, is

the absence of a reliable, independent annual measure in

current dollars which can serve as a benchmark for the

monthly VIP estimates. He discussed other weaknesses of

the program such as undercoverage of nonresidential

improvements, lack of a good price index for nonresidential

construction, and delays in getting good benchmark information for state and local government construction. He did

mention recent improvements in the program which allowed

Census to estimate $30-$50 billion additional nonresidential construction and he advocated further program enhancements.

He then raised several classification issues that he

would like to see addressed in future work. He suggested

we review the definition of equipment and structure and

attempt to develop a clear demarcation between them. It is

often difficult to distinguish between equipment and structure in nonresidential construction, for example: is an

elevator in a building structure or equipment; is an oil

refinery all equipment? Construction activity is not always

classified in the most appropriate category when companies build structures for one purpose but convert them to

another purpose upon completion. There is the related

classification problem when buildings are converted to

purposes different from their previous usage (for example,

old warehouses being converted to residential units).Another

classification problem arises when a builder constructs a

road for a housing development and turns the road over to

the local government. There are inconsistencies when

classifying such construction as either private or government construction.

Mr. Parker observed that we are likely to miss the

component of ‘‘force-account’’ construction activity (that is,

a firm doing construction using its own employees) because

our frame for nonresidential construction comes from lists

of projects contracted to construction firms. This may result

in an underestimate of nonresidential improvements.

Mr. Parker observed that care must be exercised to

exclude nonconstruction costs from the price of a house

when developing VIP estimates of new residential construction. For example, we do not want the price of a refrigerator

11

U.S. Census Bureau
(when sold along with a new house and included in the

house price) to be included in the output of the construction

industry. Commissions are included in the price of a house,

but we would not want them to be included as output for the

construction industry.

Mr. Parker observed that the VIP estimate for singlefamily housing is based on a model using information

collected in SOC. He suggested that collecting singlefamily VIP through a direct measure would do a better job

at capturing the cyclical nature of residential single-family

construction. Under current practices, construction on a

single-family housing unit contributes to the VIP estimate

with phasing patterns used to allocate the total construction

cost over a 12-month period. Mr. Parker feels that the

patterns currently in use are dated and they tend to allocate

construction costs incorrectly. Mr. Parker also reported that

international guidelines for compiling GDP treat construction in progress as inventory and add it to investment for

purposes of the GDP only at the time of sale, as with other

goods.

Mr. Parker next raised the issue of price indexes. He

observed that we use hedonic techniques for our singlefamily price index and that BEA has worked with Census

staff to develop a multifamily index. He feels that its use to

deflate multifamily construction has been a substantial

improvement over the previous practice of employing a

single-family index for that purpose. He observed that there

are no price index programs for nonresidential construction. He suggested that the Bureau of Labor Statistics

(BLS), as part of the newly expanded service industry

producer price index program, may provide new prices in

this area and that Census, BLS, and BEA should consider

joint work in this area. In the meantime the VIP program

and BEA employ a variety of cost indexes to calculate

inflation-adjusted values for nonresidential construction.

As a final issue, Mr. Parker discussed revisions to the

GDP. He observed that VIP revisions cause GDP revisions

and suggested that we try to put procedures in place that

keep our revisions as low as possible. He noted that recent

improvements have been good but more are needed and

added that the VIP program always needs attention.

FLOOR DISCUSSION

Several attendees remarked that our one-family phasing

patterns are dated and they suggested alternatives to their

use. One attendee suggested that we collect monthly

construction costs from all single-family homes in the

Survey of Construction, from start through completion, to

allocate construction costs in the month incurred. (This

corresponds to how we collect monthly construction costs

for multifamily structures as well as for private nonresidential construction.) Others suggested that we update our

phasing patterns to more accurately reflect current building

practices. It was suggested that we might vary the pattern

to account for different stages of the business cycle.

One attendee asked if land development costs show up

in our VIP estimates for new residential housing. A Census

representative indicated that they are reflected in the price

of a house and contribute to the VIP estimate.

One attendee observed that there is geographic detail in

the annual report but none in the monthly and asked if

there can be sub-annual geographic breakouts. For example,

could there be monthly sub-national geographic estimates

for total VIP or could the Census provide geographic detail

quarterly? A Census staff member observed that our

sample size does not support publishing further geographic

detail on a monthly basis.

One attendee asked if there would be advantages to

publishing quarterly rather than monthly estimates and

another responded that he finds monthly data valuable and

uses it for internal indexing. Mr. Parker observed that if VIP

estimates came out quarterly it would delay BEA’s preparation of GDP by about 2 months. He felt that this would not

be acceptable from a policy perspective.

One attendee stated that she would like to learn more

about the employment picture on a monthly basis. She

observed that industry trends affect employment. Census

staff observed that detailed employment information is

available from the Bureau only in its census of construction

and that the BLS has found that their monthly contract

construction employment and payroll track well with VIP.

One attendee noted that even though BLS employment is

given at the highest level of aggregation, it does provide

information on employment in the construction industry.

In reference to indexes, one attendee stated that private

companies publish building costs by type of building and

provide costs broken down into labor and material costs.

He stated that the government does not have to collect

such data as they are available for sale from the private

sector. Mr. Parker observed that there have been attempts

to use private databases for computing indexes but that

such input-based cost indexes are not a substitute for

deflation, which requires price indexes. He noted that cost

indexes do not reflect changes in profit margins or in labor

or capital productivity.

One attendee observed that private sector methodology

is often treated as a trade secret and accordingly users are

not as comfortable with their estimates as with estimates

from government sources. The discussant who raised the

issue of private data sources observed that private estimates can be as reliable as government estimates and

they are widely used by those who require reliable information.

One attendee asked whether a separate estimate for

senior housing could be published. He observed that there

has been an increase in the type of multifamily residential

construction that provides more than just housing for

residents. For example, in some buildings, meals and

various levels of care may be provided. Another attendee

observed that housing for the disabled is also of interest

and that there has been expanded activity in that area.

U.S. Census Bureau

12
One attendee observed that the VIP program provides

the main input for the Industrial Outlook and it would be

good to have more detail by type of construction. Census

staff noted that we will soon be publishing VIP for new

types of construction and there will soon be more detail at

the annual level.

CENSUS BUREAU COMMENTS AND

RESPONSES

We agree with Mr. Parker’s comments that additional

reliable annual benchmarks for VIP are desirable. We

currently benchmark industrial buildings to estimates from

the Annual Capital Expenditures Survey (ACES) and we

would like to expand the use of that survey into other

categories of nonresidential construction. A comprehensive

review of ACES estimates is currently underway. We also

benchmark state and local government construction to the

census of governments, but that information is available

only several years after the annual reference period.

We agree with Mr. Parker on the need for indexes of

nonresidential building construction for use in preparing the

GDP. Nonresidential indexes produced in the private sector

are essentially input indexes; that is, weighted averages of

construction material prices and hourly wages. These

indexes are inadequate for deflating GDP estimates to

current dollars because they fail to reflect price changes

because of changes in productivity and market conditions.

We are currently working with BEA and BLS to develop

appropriate nonresidential price indexes.

As observed by Mr. Parker, we are missing some

improvement and repair information in the nonresidential

sector. Our sampling frame, which is based on contract

awards, does tend to undercover the smaller nonresidential improvement projects. We submitted an FY99 budget

initiative for funds to conduct a survey of nonresidential

improvements and repairs, but it was denied.

As Mr. Parker further noted, there are conceptual problems in distinguishing between structure and equipment

expenditures, and we add that breaking out structure and

equipment expenditures is often difficult for survey respondents. We provide respondents with extensive instructions

and examples on how to report expenditures. In fact, we

ask for equipment expenditures on the questionnaire to

have them separated out from structure expenditures.

Estimates for single-family VIP are based on a model

using single-family sales and contract prices. Nonconstruction costs are subtracted from the sales price (for example,

cost of raw land, price of movable appliances, sales

commissions, etc.) when determining construction costs.

Factors for removing these costs are based on surveys of

builders conducted in the early 1980s, and we are in the

process of preparing new factors from a 1998 survey.

Phasing patterns used in allocating construction costs to

months are based on information collected in 1974. We will

investigate working with industry groups to make our

phasing patterns more current so, along with new nonconstruction cost factors, we will more accurately allocate

monthly single-family VIP.

In principle, we could estimate single-family VIP directly

by collecting the monthly VIP of a sample of single-family

housing units in SOC. Providing monthly VIP information

for individual housing units will likely prove difficult for

builders. In addition, such a request will significantly increase

the response burden and costs in SOC. We feel that

employing a model and keeping model parameters current

is the most cost effective method for estimating singlefamily VIP.

Several attendees asked that we provide more detailed

estimates of VIP in our data releases. We will introduce

annual estimates of private nonresidential construction by

more detailed type of construction categories in 1999. We

also are investigating whether we can provide estimates of

total nonresidential construction VIP by state. More detailed

monthly VIP estimates of private nonresidential construction and state and local construction may be introduced in

the year 2000.

U.S. Census Bureau

13
Economic Census: Construction Sector

LEAD DISCUSSANT

Mr. Manuel D. Gutierrez

Manager, Market Research

Kohler Company

Kohler, WI 53044

BACKGROUND

Data on the construction sector of the economy are

collected every 5 years as part of the Bureau’s economic

census program. Data are actually collected from a representative sample of construction firms, including builders,

general contractors, and special trade contractors representing all facets of the construction industry. All large

establishments are in our sample as well as a representative sample of small establishments. Firms report business

receipts, payroll, assets, and other economic information

as well as types of construction they were engaged in

during the year of the census.

With each Census we produce reports in three publication series. The Industry Series provides information on

each construction industry. Included in the reports are

value of work by type of construction, statistics by size

classes, assets data, and selected industry ratios. The

Geographic Area Series provides information on each

Census Division. Reports include the statistics mentioned

above by state. The Subject Series provides summary data

for 3-, 4-, and 6-digit NAICS codes and census regions.

Estimates from the 1997 Economic Census will be produced at the National and state levels. In the past, estimates also were produced for selected metropolitan areas.

LEAD DISCUSSANT

Mr. Gutierrez began by providing an overview of the

Census of Construction Industries1 (CCI), noting that it has

been conducted on a regular basis since 1967 and currently provides estimates for employer establishments and

contains supplemental information for nonemployer establishments. It provides break-outs for residential and nonresidential builders, heavy construction, and general and

special trade contractors. Information has been provided

for the total United States, for states, and for selected

metropolitan areas.

He emphasized how the CCI provides valuable information on the structure of the construction industry. It provides

information on: average number of employees by establishment, average receipts of establishments, and percent

of one-person establishments to total establishments, to

give only a few examples. One is able to get the information by state by establishment size and one can observe

how this information has changed over time.

Mr. Gutierrez observed that this information is valuable

to companies that market products to the construction

industry. Information from the CCI can be employed to

understand the distribution of construction establishments

by state, to study market penetration and to evaluate

demand for products and potential markets by state. By

providing a national cross-section of the construction industry, the CCI is used in survey sample verification to weight

the results of private surveys. In addition, Mr. Gutierrez

stated that his company compares total counts of establishments on their mailing lists to counts from the CCI and

is able to reduce costly mailing by looking for large

discrepancies.

Mr. Gutierrez discussed some improvements he would

like to see in the CCI program. He would like to have

annual data, even if on a smaller, less comprehensive

scale, such as data on number of firms and number of

employees. He also advocated a more timely release of

CCI information, especially an earlier preliminary release.

He would like to see data released in a more easily usable,

electronic format and he advocates reducing our paper

output. For example, he recommended release through the

Internet and in SAS downloadable files for CD-ROMS. He

would like to see more comparability of information between

the CCI and other Bureau programs and with other data

sources, such as National Association of Home Builder

estimates.

Mr. Gutierrez recommended that we provide data at

greater geographic detail, such as by 3-digit ZIP Code, and

that we consider the release of microdata from the CCI

through the use of data masking to avoid breaching

confidentiality. With the availability of ample computer

resources, working with large data sets is no longer a

problem for data users.

FLOOR DISCUSSION

One attendee asked why there is an emphasis on

establishments as opposed to firms for data collection and

1

This data collection and publication program is currently referred to as

the Economic Census: Construction Sector to highlight that it fits into the

framework of the economic census.

15

U.S. Census Bureau
publication in the eonomic censuses. He observed that

users are often interested in the business entity and not

local establishment activities.

Census staff responded that we release information on

an establishment basis in order to provide geographic data

and to provide detailed industry data. It is more difficult to

place a firm in an appropriate industry classification when

its establishments operate in more than one classification

area.

Census staff observed that since we collect information

on an establishment basis and have links between establishments belonging to the same firm, we are able to create

firm data based on our collection of establishment information. An attendee responded that it would be very helpful if

firm data were also broadly available from our data release

program.

One attendee observed that microdata files are housed

in the Census Bureau’s Center for Economic Studies and

they are extremely useful for special projects. He noted the

problem of ease of access and raised the issue of release

of this microdata. Census staff observed that we have had

little success in creating public use economic microdata

sets. The skewed distribution of economic establishments

makes it very difficult to mask data enough to protect the

confidentiality of respondents while simultaneously maintaining data utility.

One attendee asked about possibilities for the release of

microdata products from the CCI employing techniques

comparable to those used in the release of demographic

microdata to protect confidentiality. Census staff responded

that, whereas households are fairly homogenous, the

population of industrial establishments is highly skewed

and individual establishments have unique characteristics.

Efforts to effectively mask establishment data to prevent

identification would seriously impinge on the utility of the

data. Another Census staff observed that we recognize the

need for microdata and have experimented with options

and are very uncomfortable with the results. He noted that

there is direct access to the CCI microdata through controlled conditions at the Center for Economic Studies at

Census headquarters and at satellite sites.

One attendee remarked that one major shortcoming of

the data collected on the CCI is that it is available only

every 5 years. It is very difficult to measure trends and data

users resort to estimating information in the noncensus

years. Doing so makes it difficult to address many policy

issues. The attendee advocated an annual program that

collects information comparable to that collected in the

CCI. A Census representative stated that we concur with

that need and that Census has requested funding for an

Annual Survey of Construction in our FY99 budget initiative.

One attendee observed that three delivery methods for

construction projects are: design/bid/build, construction

management, and design/build and noted that design/build

construction is an increasingly important component of the

industry. He stated that the CCI does not collect information

on the delivery methods for construction projects. He

advocated that the CCI collect information on delivery

methods and noted that the Design-Build Institute would be

glad to work with Census to capture that information.

Census staff agreed that this is an important issue and

stated the CCI includes information on design/bid/build and

construction management methods of delivery. We also

added a question on percent of receipts for design/bid/build

work and we will analyze the information we collect and

assess the ability of establishments to report this information to us. We will publish information on method of delivery

if the data supports doing so.

One attendee asked that the CCI provide more information on employment by type of work stating that it would be

valuable to know this information to better understand labor

issues in the construction industry. He went on to observe

that it would be desirable to have percent of employment

by type of activity comparable to information on percent of

receipts by type of activity. Right now, if a user wants to

know how many residential construction workers there are,

one must prepare estimates based on the residential

construction receipts. He would be interested in a classification of establishments by type of work activity rather than

by source of receipts. He also inquired about the possibility

of obtaining worker hours by type of activity.

A representative of the Bureau of Economic Analysis

(BEA) observed that classification of establishments by

receipts is important to the preparation of the National

Income and Product Accounts. Census staff noted that in

our 1990 Record Keeping Practices Survey, we found that

employee by function or worker-hours by type of activity

are a problematic set of questions for respondents to

answer well. Adding a question of this sort would constitute

a large increase in response burden to companies. It was

further noted that the CCI releases information on receipts

by specialization, which may provide information on employment issues.

Census staff provided information on data products for

the CCI and noted that preliminary reports will be available

in early 1999 and the complete industry and geographic

reports by the end of 1999. We will be using less paper and

industry reports will be available on CD-ROM and in

downloadable data files on the Internet. We are developing

new data access software which will be easy to use and

which will provide users with powerful capabilities.

Census staff further noted that employment and payroll

data for the Construction sector are available on an annual

basis through the County Business Patterns (CBP) program. One attendee noted that the 2-digit SIC levels on the

CBP are acceptable, but information below that level is not

useful because they are incomplete as many cells are

suppressed due to confidentiality protection. It was suggested that we release all 4-digit SIC information at the

MSA level, which should not require many suppressions. A

Census representative observed that if we were to publish

more MSA data we may have to suppress more county

data to avoid derivative complementary disclosures.

U.S. Census Bureau

16
CENSUS BUREAU COMMENTS AND

RESPONSES

Data on the construction sector of the economy are

collected as part of the 1997 Economic Census. Forms

were mailed to respondents in January 1998 and respondents were requested to provide information for calender

year 1997. The forms were due in February 1998, processing was closed-out in August 1998 and data review proceeded from that time onward. The first data will be

released as part of the Economic Census Advance Report

due out the first part of 1999. Our first 1997 construction

industry reports will be released in March 1999.

The reports will be released as portable data format

(PDF) files and electronic data files on the Census Bureau

Internet site www.census.gov and also will be available on

CD-ROM. The 1997 construction industry and state reports

will not be released in printed format, only the Subject

Series, Industry, and Area U.S. summaries will be released

as printed documents in addition to the electronic format

releases.

Statistics on selected metropolitan areas have been

discontinued as a cost saving measure to absorb cuts in

funding. Information by state will continue to be released.

We can produce tabulations for individual metropolitan

areas or other suitable geographic areas on a cost reimbursable basis.

As noted in the floor discussion, we find it very difficult to

release economic microdata because of confidentiality

concerns. We do invite those interested to advise us of

special tabulations needed that we may be able to provide.

Another option is to take advantage of the microdata

housed in the Census Bureau’s Center of Economic Studies for the conduct of special studies.

Several discussants indicated an interest in an annual

construction survey to provide information between censuses, in particular, annual estimates of receipts which

would prove valuable for the National Income and Product

Accounts. Realizing a demand for annual data, we requested

funds for an annual construction survey in our FY99 budget

initiative, however, our request was denied.

As discussed earlier, we collect information at the establishment level (rather than the company level) because we

can clearly define an industry classification for each establishment. Establishment information can be aggregated

across states and other geographic areas to produce

geographic based estimates. Furthermore, establishment

information can be aggregated to the company level to

produce company information and tabulations can be

created on a cost reimbursable basis.

An important issue for Census is comparability between

estimates from different programs and we endeavor to

cross-check information between programs. For example,

we added a question on the 1997 construction census

report forms about residential housing starts in an effort to

investigate comparability in data collection between the

economic census program for construction statistics and

Survey of Construction.

We also continually review data collected in all our

programs to provide information that is useful and current.

As an example, we added a question on the 1997 construction census report forms on receipts obtained under

design/bid/build contracts to measure the emergence of

new project delivery methods in construction.

U.S. Census Bureau

17
Overview of Construction

Statistics Programs

Section 2
Construction Statistics Programs

The following sections describe in general terms and in

detail the major programs conducted within the Census

Bureau’s Manufacturing and Construction Division (MCD)

for producing construction related statistics. Our programs

provide information on new construction, expenditures for

residential improvements and repairs for existing structures, and manufactured homes. Even though this report

was prepared in conjunction with the Construction Statistics Data Users’ Conference, held on October 28, 1997, it

can serve as an independent document providing an

integrated description of our programs. These programs

are constantly changing and some methods used in the

past are no longer employed. We have noted some of the

significant changes.

Our programs are complex, and data collected for one

program are often used by other programs. We have

included flowcharts to help make the program activities

easier to understand and to show relationships between

programs.

Some statistics on construction are compiled by other

divisions of the Census Bureau and by other government

agencies. The programs that produce those statistics are

not described in this report .

In the Brief Summary of Programs of this report, we

introduce our programs, list their major products, and

provide a display showing the products, programs, and

data sources used in the estimates. In the next section, we

present details of each of the programs and highlight how

our programs are related to one another.

For those wishing more detail on any of our programs,

we recommend the technical appendixes in our published

reports. They provide detailed information on methodology,

definitions, data limitations, and a wealth of other features.

21

U.S. Census Bureau
Brief Summary of Programs

DESCRIPTION OF INDIVIDUAL PROGRAMS

Building Permits Program

The Building Permits Program collects information on

building permits issued for new private residential construction. Information is collected from permit-issuing jurisdictions on number of housing unit permits issued and their

permit valuation. These statistics are a leading economic

indicator.

Data are collected monthly from a sample of permitissuing places and annually from the remaining permitissuing places. Places not previously issuing permits are

contacted every few years to determine if they have begun

issuing permits and the sample is periodically reselected to

better represent the expanding universe of permit-issuing

places.

Monthly and annual estimates of housing units authorized by building permits are available on the Internet both

unadjusted and seasonally adjusted for the United States

and the four regions. Unadjusted estimates by states and

metropolitan areas are also available. Data for individual

permit offices are available from the Census Bureau.

Survey of Construction (SOC)

The Survey of Construction (SOC) collects and publishes information on residential units started, sold, and

completed each month. In addition, a variety of housing

characteristics, such as unit price, number of bathrooms in

unit, and size of unit, are published quarterly and annually.

Information is collected directly from builders by field

representatives.

The publication series Housing Starts (C20) is published

monthly and provides information on the number of housing starts throughout the United States. Information includes

estimates of housing units authorized, started, and authorized but not yet started. The Housing Units Started series

is a Cyclical Indicator of Fixed Capital Investment.

The publication series New One-Family Houses Sold

(C25) consists of 12 monthly reports. Information includes

estimates of units sold and for sale, average and median

sales prices, and price distributions of units sold. The Price

Index of New One-Family Houses Sold also appears in this

report.

The Characteristics of New Housing report (C25A) is

published annually. It includes price and physical characteristics data for new houses completed, new houses sold,

and new multifamily buildings completed. More than 25

physical characteristics are shown—for example, size,

number of bathrooms, type of heating system, and type of

exterior wall.

The series Housing Completions (C22) is published

monthly and provides information on the number of housing units completed in a month and on those under

construction.

The series New Residential Construction in Selected

Metropolitan Areas (C21) is published quarterly and provides information by metropolitan area on units authorized,

started, and completed. We are currently evaluating the

need for this publication and it may be soon discontinued if

we find that it is not widely used.

Value Put in Place Program (VIP)

The Value Put in Place Program (VIP) publishes estimates of the value of construction work performed each

month. Information is gathered from a variety of sources

including a family of direct mail surveys collectively referred

to as the Construction Progress Reporting Surveys (CPRS).

The value of construction work performed for singlefamily houses is derived from Survey of Construction data

and value of construction work for multifamily units is

collected from builders through a CPRS survey. Information on improvements for owner occupied units is collected

in the Consumer Expenditure Survey (CES) and information on improvements for rental units is collected in a

followup to the Consumer Expenditure Survey.

The value of construction work for private nonresidential

construction and for state and local government construction are collected through a CPRS using a frame of

construction projects compiled by the F.W. Dodge Company. Information on nonresidential farm construction is

provided by the Department of Agriculture; information on

Federal construction is provided by a variety of Federal

agencies; and information on public utilities is provided by

regulatory agencies and private sources.

The monthly publication series Value of Construction

Put in Place (C30) provides information on the value of

construction work done. Included in the reports are national

estimates by type of construction in current and constant

dollars and price deflators. An annual revision is published

23

U.S. Census Bureau
as an expanded May report. The quarterly publication

series Expenditures for Residential Improvements and

Repairs (C50) provides information on residential improvements.

Manufactured (Mobile) Home Program

The Mobile Home Placement Survey collects information from mobile home dealers about inventories and sales

each month. The National Conference of States on Building Codes and Standards (NCSBCS) acting as an inspection agent for Department of Housing and Urban Development produces a frame of units shipped by manufacturers

to dealers from which we sample. Information is collected

and estimates are published on the price of units sold and

their characteristics. We also publish information on manufacturers’ shipments of mobile homes compiled from manufacturers’ reports to NCSBCS.

Both the NCSBCS’ shipments data and estimates produced from the Mobile Homes Placement Survey appear in

the Housing Starts publication series. The monthly placements estimates include mobile homes in dealer’s inventories, mobile homes placed, and average sales price of

mobile homes. The Housing Starts publication in June

contains annual estimates of characteristics and state

estimates of placements and sales prices.

Economic Census: Construction Sector

Data on the construction sector of the economy are

collected every 5 years as part of the Bureau’s economic

census program. Data are actually collected from a representative sample of construction firms, including builders,

general contractors, and special trade contractors representing all facets of the construction industry. All large

establishments are in our sample, as well as a representative sample of small establishments. Firms report business receipts, payroll, assets, and other economic

information as well as types of construction they were

engaged in during the year of the census. The sample

includes all larger establishments and a sample of smaller

establishments.

With each Census we produce reports in three publication series. The Industry Series provides information on

each construction industry. Included in the reports are

value of work by type of construction, statistics by size

classes, assets data, and selected industry ratios. The

Geographic Area Series provides information on each

Census Division. Reports include the statistics mentioned

above by state. The Subject Series provides summary data

for 3-, 4-, and 6-digit NAICS codes and census regions.

Estimates from the 1997 Economic Census will be

produced at the National and state levels. In the past,

estimates also were produced for selected metropolitan

areas.

SUMMARY DISPLAY OF CONSTRUCTION

STATISTICS PROGRAMS

The display on the next page presents a summary of the

major construction statistics programs. In the left column,

we show the publications and products from each major

program. These are in a state of change at this time as we

move to increased electronic dissemination. In the second

column are the surveys that provide estimates for the data

products in the first column. In the last column are additional sources of data which also are used to provide

information for our data products and contribute to our

estimates. The next section contains detailed information

about these programs and highlights interrelationships

between them.

U.S. Census Bureau

24
Figure 1.

Publications/

Products Surveys Sources Employed in

Producing Estimates

Building Permits Program

Housing Units

Authorized

by Building

Permits

Building

Permits

Survey

Residential Starts, Sales, and Completions Program

C20 - Housing Starts

C25 - New One-Family

Houses Sold

C22 - Housing

Completions

C21 - New Residential

Construction in Selected

Metropolitan Areas

Survey of

Construction

Value Put in Place Program

C30 - Value of

Construction Put in

Place

C25 - Expenditures

for Residential

Improvements and

Repairs

Price Index Series

Multifamily Nonresidential

State

and

Local

Progress Reporting Surveys

CE Mail

Manufactured Homes Program

Placements and

shipments data

are in C20

Manufactured

Homes

Survey

Manufactured

Homes

Shipments

Value Put in Place Program

Advance Report

Industry Report

Series

Geographic Area

Report Series

Subject Series

Economic Census:

 Construction

Sector

One-Family

Public

Utilities

CE

Survey

Farm

Nonresidential

Federal

Government

25

Construction Statistics Programs
Program Details

BUILDING PERMITS PROGRAM

The Building Permits Program consists of two surveys, a

monthly and an annual survey of local government offices

that are responsible for recording and regulating new

construction. In 1995, about 19,000 county, city, town,

township, and village governments required permits for

new construction. These places are referred to collectively

as the Building Permit Place Universe and constitute the

sampling frame for this program. From estimates available

from the Survey of Construction (SOC), we know that

about 97 percent of all residential construction in 1997

occurred in places covered by this universe.

New permit places are constantly being identified. Places

(cities, towns, counties, etc.) without permit systems could

begin issuing permits at any time. These new places are

not immediately introduced into our sampling frame to

avoid distorting estimates of month-to-month change. Before

a new monthly sample is selected, the new places are

added to the Building Permit Place Universe and our frame

is updated at that time. The last time new places were

added to the universe and a sample selected was 1994

and the universe went from 17,000 permit offices to about

19,000. The first time data was published for this sample

was January, 1995 with the publication of annual data for

1994.

Monthly Survey

For the monthly Building Permits Survey we usually

select a new sample of permit-issuing places from the

Building Permit Place Universe after a decennial census.

The sample includes all permit places in all Primary

Metropolitan Statistical Areas (large population centers

located near other large population centers) and the 25

largest Metropolitan Statistical Areas (large population

centers not located near other large population centers),

which provides for precise estimates for these areas. The

remainder of the Building Permit Place Universe is stratified by state to allow for good state estimates. In some of

the small states, all permit-issuing places are in the sample.

In other states there is a certainty stratum and a noncertainty stratum which is sampled at the rate of 1 in 10. The

total sample size is about 8,500 places. Each month permit

offices in sample are mailed a questionnaire which they are

asked to return to our National Processing Center (NPC) in

Jeffersonville, Indiana, for data entry. On the questionnaire,

we ask how many residential buildings and units were

authorized in the past month for single, two, three or four,

and five-or-more-unit buildings and what was the total

permit value. Data for additions and alterations, demolitions, and nonresidential structures were collected in the

past, but are no longer included in this program.

There are a number of permit offices which have special

arrangements with us and they send printouts or electronic

transmissions of permit activity. There are also some

special arrangements for joint data collection with state

agencies that want data from places in their state. The

arrangement might result in the state agency collecting the

data and providing it to us or vice versa. A variety of

arrangements have existed throughout the life of this

survey.

After the data are entered in Jeffersonville, they are

transmitted to headquarters for computer editing, correction, review, and tabulation. Since correlations among data

items are small, there are few inter-item ratio edits and no

extensive multivariate edits. Imputation for item nonresponse is performed during a computer edit at headquarters. Ratios of current period data to prior year’s annual

data for respondents are computed and these ratios are

applied to the prior year’s annual data for nonrespondents

to create imputes for the current time period. During the

edit in Jeffersonville and at headquarters telephone calls

may be made to the respondents to confirm or correct

reports.

Monthly estimates include totals of housing units authorized for one, two, three or four, and five-or-more-family

buildings at the National, regional, and state levels and for

metropolitan areas. Sample data are weighted up by the

inverse of their probability of selection and aggregated to

provide estimates. National and regional estimates of

authorizations are seasonally adjusted, however, state and

metropolitan estimates are not adjusted.

A preliminary estimate is produced in the middle of the

month following the month covered by the data. At the end

of that month a revised estimate is published. When the

annual survey is complete, monthly estimates are revised

again as they are benchmarked to the annual totals to

ensure that the sum of the 12 monthly estimates equals the

total from the annual survey.

When the universe is increased to introduce new permitissuing places, we estimate National and state totals of

authorizations under both the old sample (representing the

older, smaller universe) and the new sample (representing

the new, larger universe). We conduct the overlap sampling

27

U.S. Census Bureau
for 12 months to observe the change in levels due to the

new expanded universe. Based on the overlap, a user can

adjust the historical series so that comparisons with previous year of rates of growth and level estimates can be

made on a common universe structure.

Annual Survey

All permit-issuing places in the Building Permit Place

Universe that are not in the monthly sample are canvassed

annually by mail. Data from places in the monthly sample

are summed to provide annual values, which are combined

with data from places in the annual survey to obtain annual

totals. Annual data are published for each permit-issuing

place and are aggregated to provide United States, state,

and metropolitan area totals. Imputed data are included in

these totals for places that do not report.

After the annual totals become available, monthly estimates of residential authorizations are benchmarked to the

annual totals by Census region and type of structure.

Annual totals are used as the measures of size when the

monthly sample of permit-issuing places is reselected. In

addition, these data are employed in various demographic

surveys.

Special Features

Building Permits Survey (BPS) data are not confidential,

so we are able to provide response data to users. Data for

the past 10 years are available for a fee. This includes

additions and alterations and nonresidential data collected

in the past but no longer collected.

SOC field representatives visiting permit offices have

observed that some permits do not contain sufficient

information to distinguish attached single units from multifamily units. Permit offices occasionally classify them incorrectly when they report data to us. We do not adjust the

Building Permits Survey’s estimates of authorization for

these errors. Such an adjustment would not affect estimates of total units, but would alter the distribution between

single family and multifamily.

Some states require permits for certain types of construction anywhere in the state, for example, buildings with

more than a specified number of units. If a local jurisdiction

does not issue the permit, a state office will issue one. The

type of state permit place that is created is different from

state to state. We attempt to include these types of places

in the permit universe.

The highly reliable estimates of housing units authorized

that are produced in the BPS are used to ratio-adjust

estimates of units started from the SOC. This substantially

reduces the variance of the SOC estimates. Building

Permits Survey estimates also are used to ratio-adjust

estimates from the American Housing Survey.

THE SURVEY OF CONSTRUCTION

The Survey of Construction (SOC) is one integrated

operation which provides estimates of starts, sales, and

completions of residential buildings. For the purpose of this

survey, a start is defined to be when excavation begins for

the footings or foundation of a building. A single-family

housing unit is defined to be complete when it is occupied

or when the finished flooring is installed and a multifamily

residential building is defined to be complete when at least

50 percent of the units in the building are complete. A sale

of a single-family house is defined to be when a contract is

signed to purchase a unit and this can occur at any stage

of the construction process: before a permit is taken out,

after the unit is completed, or any time in between. Sales of

multifamily units (condominiums) are not collected.

Sample Design

The name Survey Use of Permit (SUP) is given to the

SOC activities in areas of the country where building

permits are required. The name Nonpermit Survey (NP) is

given to SOC activities in areas of the country where

building permits are not required. The only differences

between the two surveys is the sample design and the

initial data collection. The sample design for the Survey

Use of Permit will be described in the next section followed

by the sample design for the Nonpermit Survey.

Survey Use of Permit (SUP). Sampling for the SUP is a

four stage design. The entire nation is divided into groups

of counties and New England towns which are collectively

referred to as Primary Sampling Units (PSUs) and they are

sampled for the Current Population Survey (CPS). The first

stage of sampling for the SUP is the same as the sample

selection of PSUs for the Current Population Survey. In the

second stage of sampling for SOC we select a subsample

of the Primary Sampling Units selected for the Current

Population Survey and in the third stage, a sample of

permit-issuing places is selected in each PSU. The fourth

and final stage of sampling is a selection of building permits

from each place included in the third stage sample.

The final sample of permits is produced by field representatives visiting permit issuing offices, preparing a list of

the residential permits issued during the month and choosing a sample from the list (following a well-defined procedure). The final stage of sampling is repeated monthly.

Each month field staff list new permits and select a sample

of them. The sampling weights on each sampled permit

reflects all four stages of the process.

With the recent introduction of computer assisted personal interviewing (CAPI) and collection of data with the

use of laptops, the field staff enters the list of new permits

into a CAPI listing instrument and the CAPI system selects

the sample of permits for interviewing. A process referred

to as patterned sampling is used for this final stage of

U.S. Census Bureau

28
sampling under CAPI. As permit information is entered into

a laptop computer, the computer selects a sample. As more

permits are entered, the sample is adjusted so its size is

approximately constant. Certain patterns of selected and

nonselected cases are preprogrammed to accomplish this

adjustment to a constant size sample.

Nonpermit (NP) Survey. Since a portion of the country is

not covered by permit-issuing places, the Nonpermit Survey is conducted. The first and second stages of sampling

are the same as for the SUP: a subsample of PSUs is

currently employed in the CPS. All of the census enumeration districts that are in these PSUs and are not within the

jurisdiction of a permit-issuing place become the frame for

the third stage of sampling. A sample of these districts is

selected as the third stage. The selected districts are

referred to as area segments. Area segments are canvassed each month for new residential construction and all

units identified are included in the SOC sample.

Before 1980, the NP Survey covered 15 percent or more

of the residential construction. Around 1980 the percentage

dropped below 10. In 1995, following the most recent

building permit universe update, the amount of residential

construction in nonpermit areas fell to 3 percent of the total.

Processing and Estimation

Data are collected by field interviewers. For the SUP,

each building permit selected in the sample contains the

address of the proposed construction location and the

name of the builder. For the NP Survey, the field representative must locate a builder for the started housing unit

observed. Under either scenario, builders are contacted

each month to obtain start date and completion date for all

sample units and sale date for single-family units built for

sale. A permit or observed start address stays in sample

until the building is completed and sold (for those for sale)

or until it is designated as ‘‘abandoned.’’

Most response data are collected via telephone calls

from the interviewer’s home to the builders of the sampled

units. In order to collect all of the start, sale, and completion

information, a respondent may be called in many months.

If the builder or some other respondent is not available by

phone to provide needed information, the interviewer is

required to visit the building site for the information. A start

is determined if excavation for a foundation is observed at

the site. If sale or completion information is required and no

respondent is available by phone, we treat that as not sold

or not completed and the next month we attempt to

interview.

For single-family houses, characteristics such as presence of basement, number of bathrooms, square footage,

and so on are collected. For multifamily houses, characteristics of the building are collected, for example, number

of efficiency units in the building and number of units with

two bathrooms. One use of these characteristics is to

develop price indexes for single-family and multifamily

buildings. Price indexes are described later in this report.

For many years, the SOC has been conducted using

forms to list permit information and two questionnaires to

record respondent information (a one-family version and a

multifamily version). Forms were sent to Jeffersonville,

keyed, and then sent to headquarters. After data arrive at

headquarters, the review, correction, and tabulation process begins. A computer assisted personal interviewing

(CAPI) system has replaced these forms with laptop computer programs. In the permit listing program, the interviewer enters permit information. Builder addresses already

on file are copied by the computer to the questionnaire for

sample cases and the interviewer enters builder address

information for the builders not on file, updating the builder

file. The computer selects the sample, a case management

system organizes the telephone interviews, and an automated questionnaire guides the interview and edits the

response data.

The system achieves a more rapid collection of data,

fewer late reports, and better quality of data since questionable responses are verified immediately. All data collected in the field are transmitted directly to headquarters

for review and tabulation.

Monthly estimates of starts, sales, and completions are

made at the National level and for regions, and starts and

completions estimates are made for selected metropolitan

areas for one, two, three or four, and five-or-more-family

buildings. The quarterly or annual estimates include units

started, one-family units sold, units completed, and a wide

range of characteristics of housing such as sales price,

square footage of house, presence of garage, etc.

A large reduction in variance occurs from a ratio adjustment procedure using the BPS’s estimate of authorizations

since this estimate has a low variance. To ratio-adjust, we

first estimate the ratio of some characteristic to housing

units authorized. For example, we may form the ratio of

units started to total authorizations, where both components of the ratio are estimated from the SOC design.

These ratios are multiplied by the Building Permits Survey’s estimates of housing units authorized to yield a ‘‘ratio

adjusted’’ SOC estimate of units started.

The major estimates from SOC (starts, sales, and

completions) are highly seasonal. Seasonally adjusted

annual rates (SAAR) are computed using the Bureau’s

seasonal adjustment programs.

Starts and completions estimates are published as

preliminary, first, and second revisions. Since sales estimates are subject to greater numbers of late reports than

starts and completions, they have a third revision. The first

estimates of starts are released about 2 weeks after the

reference month as preliminary estimates. First and second revisions are issued in the subsequent 2 months. The

first estimates of sales and completions are issued about 4

weeks after the reference as preliminary estimates. First

U.S. Census Bureau

29
and second revisions for completions and first, second,

and third revisions for sales are issued in subsequent

months.

Special Features

Survey of Construction data used in other programs.

The SOC collects respondent name and address and

building location for multifamily buildings authorized in the

permit-issuing places in sample. This data becomes the

sampling frame for the Multifamily Construction Progress

Reporting Survey portion of the Value Put in Place Program. A sample of nonresidential building permit information collected in SOC is employed in an evaluation of the

construction project frame used in the nonresidential Value

Put in Place Program.

The Value Put in Place Program derives one-family

construction value estimates from SOC. In addition, the

single-family price deflator for single-family Value Put in

Place is computed from data collected in SOC. The BEA

has developed a multifamily price deflator for Value Put in

Place estimates which also uses data collected in SOC.

The Survey of Market Absorption (SOMA) uses completed multifamily buildings as its sampling frame. The field

interviewers working on SOC usually collect the data for

SOMA. The permit listings for the permit places visited by

SOC interviewers are used in the Permit Address Listing

(PAL) portion of CPS.

Survey of Construction estimation issues. Since a sale

is defined to be when a sales contract is signed, sales

contracts signed prior to an authorization are a particular

problem because they will not be recorded by a field

representative in the survey as a sale until a permit is taken

out. We attempt to estimate for them and they are, in part,

responsible for the large revisions in our preliminary estimates.

Attached housing units that are separated by a complete

ground to roof wall are considered one-family units for

purposes of SOC. Some permit places treat these types of

units as multifamily. During the listing of the permits at the

permit office, the interviewer cannot tell if a multifamily

building is one-family by our definition. If it is listed as

multifamily and later turns out to be one-family, its status is

changed. The one-family units which have now been newly

identified are treated as if they were part of the one family

list of permits and they are sampled as an extension of that

sample.

In order to account for housing units started in permitissuing places without authorization, an adjustment factor

of 1.033 is applied to SOC estimates. This factor was

computed from an evaluation study conducted in the

1960s. Due to the great expense involved in such a study,

the operational difficulties with collecting the necessary

data, and the inability to accurately estimate for what is

most likely a small value, the evaluation study has not been

repeated. The old factor is still in use even though there is

considerable doubt that it is warranted, especially in urban

and metropolitan areas. Accordingly, we are planning to

eliminate the 3.3 percent factor from our estimates.

Survey of Construction Flowchart

The flowchart on the next page shows how data in SOC

are collected and employed in providing direct estimates or

as input to other construction statistics programs.

U.S. Census Bureau

30
Nonresidential

VIP coverage

evaluation

Building

Permits

Supplement

to PAL

portion

of CPS

SOMA

sampling

frame

SOC

publications

Building

Permits Survey

data imputes

SOC sample

selection

Multifamily

VIP sampling

frame

SOC data

collection

Listing of

SOC cases

One-family

VIP

One-family

price index

Multifamily

price index

Nonpermit

area

canvass

Supplemental

projects for

nonresidential

VIP program

31

Figure 2. Survey of Construction

and Related Activities
VALUE PUT IN PLACE PROGRAM

The Value Put in Place Program is a complex collection

of data gathering activities with the purpose of estimating

the total dollar value of construction work done each month

for use in the National income and product accounts.

Estimates of Value Put in Place (VIP) are produced at the

National level by type of construction and include new

construction, additions and alterations to existing buildings,

and major replacements of components of existing buildings. The architectural, engineering, and miscellaneous

costs associated with construction are included in VIP.

Maintenance and repair costs and the cost of land are out

of scope and are not included. Current dollar and constant

dollar series are produced and published as well as the

indexes used to deflate the current dollar series. Estimates

for the various components of VIP are derived from different sources and each component will be discussed separately below.

The Construction Progress Reporting Surveys (CPRS)

refer to three monthly surveys that we conduct to directly

collect information on monthly expenditures on construction projects for use in the VIP estimates. They collect

information for 1) new multifamily construction, 2) private

nonresidential construction, and 3) state and local government construction. They all collect information on the

progress made on a sample of construction projects and

are discussed in detail individually below. A project consists

of all buildings and other related items under construction

for which construction costs can be provided jointly by a

respondent.

The table below shows components of the VIP estimates, their percent of total VIP in 1997, and the source of

the data used in producing the estimates. The total value of

construction work put in place in 1997 in current dollars

was $618.2 billion. The flowchart on the following page

highlights the components of VIP estimates and data

sources used in the production of the estimates, as described

in the table below. Each of these factors are discussed in

detail in this section.

Components of the Value Put in Place Program Estimates

Percent of total

Component of VIP VIP in 1997 Sources of data

Residential

New one family 27 Derived from SOC data

New multifamily 4 CPRS

Residential additions, alterations

and improvements

13 Consumer Expenditure Survey, Survey of

Residential Alterations and Repairs

Private Nonresidential

Nonfarm nonresidential 27 CPRS

Farm nonresidential 1 Department of Agriculture International Trade

Administration

Public utilities 6 U.S. Telephone Association

Edison Electronic Institute

Surface Transportation Board

Federal Energy Regulatory Commission

American Gas Association

Government Construction

State and local 21 CPRS

Federal 2 Government Agencies

Total percent does not add to 100 because of rounding.

U.S. Census Bureau

32
Multifamily

4%

Progress

Reporting

Survey

Summary of Value

Put in Place Program

SOC

Model based

estimation

Multifamily

sample

One family

27% 27%

Nonresidential

F. W.

Dodge

State and Local

Progress

Reporting

Survey

Nonresidential

Progress

Reporting

Survey

One family

21%

CE

Survey

CE Mail

Survey

Residential

improvements

13%

Agriculture

data

Farm

residential

1%

Public utility

reports

Public

utilities

6%

Federal

agency

reports

Federal

government

2%

33

Figure 3.
New One-Family Value Put in Place

Data to estimate one-family VIP are derived from information collected in SOC on the construction of one-family

houses. VIP estimates are derived from estimates of the

number of houses started, estimated sales price or contract value, estimated time to completion, and estimated

nonconstruction costs which are included in sales (or

contract) price. Below we outline the steps in deriving an

estimate of one family VIP from SOC information. Parameters for the various procedures were estimated from

evaluation studies conducted in the past.

1. Each month the average price of houses started with

the intention of being sold and the average contract

value of houses built by contractors are estimated from

SOC data.

2. The average construction cost of houses started is

computed as the product of the averages above and

the proportion of those averages that is true construction costs. Some costs included in the averages above

but excluded from construction cost are land, marketing, and appliances.

3. The total number of units started each month, as

estimated from SOC, is multiplied by the average

construction cost and summed to arrive at total construction cost of houses started for each month.

4. Total construction cost for a month is multiplied by a

phasing pattern factor to obtain the monthly contribution to VIP. The phasing pattern is used to allocate a

proportion of the total construction costs of an average

house to each month that a house is under construction.

5. The VIP for 1 month is the sum of the monthly

contributions to VIP from houses started in the current

month and each of the 11 previous months.

New Multifamily Value Put in Place

Estimates of VIP for new multifamily buildings are obtained

through a Construction Progress Reporting Survey (CPRS)

of the multifamily projects selected in the SOC sample.

When multifamily activity is high, all large projects are

taken with certainty and smaller ones are subsampled.

Otherwise all multifamily buildings in the SOC sample are

included in the multifamily CPRS sample. Most projects are

in permit places with only a very few in nonpermit segments.

Questionnaires are mailed each month to owners of

projects selected in the sample and respondents are asked

to report the value put in place for that project for the

current month and succeeding months. Completed projects

are removed from the survey and projects not yet started

are held in an abeyance file until they start. The owner’s

estimate of total construction cost and the total architecture, engineering, and miscellaneous costs also is collected when the project becomes part of the sample.

Telephone follow-up is conducted for nonrespondents.

Response data are keyed in NPC and sent to headquarters for tabulation. Edits are performed to ensure that

project estimates are reasonable. If a respondent does not

provide an estimate of total construction cost for a project,

one is imputed. If a respondent does not provide monthly

VIP, a value is imputed based on total project costs.

The probability of selecting a project into the sample is

available from SOC and the inverse of this probability is

used to compute the weighted VIP. The weighted VIP are

summed for all projects under construction in a month to

obtain an estimate of total monthly VIP. A ratio adjustment

with the Building Permits Survey’s estimates of multifamily

units authorized is used to improve estimate quality.

The monthly value put in place for each project in the

sample is increased by the ratio of the architecture, engineering, and miscellaneous costs to the total construction

cost to distribute these additional costs over the life of the

project.

Residential Improvements

Estimating for residential improvements is a two-part

operation conducted in conjunction with the Consumer

Expenditure Survey (CES). The CES is conducted by the

Census Bureau for the Bureau of Labor Statistics and

contributes to the derivation of the Consumer Price Index.

The sampling units for the CES are households and the

sampling frame is the address listings maintained by the

Census Bureau. The sample for the CES is periodically

reselected and the most recent sample was selected

following the 1990 Census. For owner-occupied housing

units, we employ information about improvements as collected directly on the CES questionnaire. For vacant or

rented housing units, we collect information from the

owners in a mail survey that we conduct, referred to as the

Survey of Residential Alterations and Repairs (SORAR).

Information is collected on expenditures for additions,

alterations, major replacements (such as replacement of a

roof), and maintenance and repairs. We collect the amount

of money a household spent on construction materials and

labor by type of job. Maintenance and repairs data are

published but they are not included in value put in place

estimates.

Approximately 70 percent of our estimate of residential

improvements comes directly from the CES and the remaining portion comes from SORAR. We first describe activities

in deriving estimates for owner occupied housing units and

then describe activities for vacant or rental units.

The Consumer Expenditure Survey (owner-occupied

units). All household expenditure data are collected for

owner-occupied housing units by field representatives conducting personal interviews which typically last 2 hours or

U.S. Census Bureau

34
more. Five interviews are conducted with each respondent

over a 1-year period. After the initial interview, four more

interviews are conducted at 3-month intervals to collect

data on expenditures. After the fifth interview, the respondent is removed from the survey. As respondents are

removed, new households enter the survey. Estimates are

adjusted to compensate for nonresponse.

Quarterly Survey of Residential Alterations and Repairs

(rental and vacant units). If a housing unit in the CES

sample is vacant or occupied by a renter, the unit is

included in SORAR, which is a mail survey sent to the

owner of the unit.

The owner of a rental or vacant unit from the CES is

contacted and asked to report construction expenditures

for the property which includes the unit. About half the units

are single-family houses. If a property is a housing complex

which includes one or more buildings, data are collected for

the entire complex and should include expenditures on

common areas such as recreation buildings and swimming

pools. The total expenditures for the property are divided

by the number of housing units in the property to provide an

expenditure value for the housing unit in sample.

Once this information has been keyed and edited we

adjust for nonresponse. Separate nonresponse factors are

computed for vacant units and for rental units.

Private Nonresidential Construction (Nonfarm)

A private company, F. W. Dodge, produces a list of

construction projects, which we purchase and use as a

sampling frame of nonresidential construction. Construction projects include new buildings, an addition or alteration

to an existing building, or a major replacement such as the

replacement of a roof, and construction other than buildings such as golf courses. Maintenance and repair projects

are not included in our survey.

Since the Dodge list does not usually include projects in

nonpermit areas of the country, a canvass for these

projects in nonpermit areas is conducted in conjunction

with the residential canvass for SOC. Projects identified in

the canvass are used to supplement the Dodge frame.

Field interviewers working on SOC in permit-issuing places

also list a sample of permits for nonresidential construction,

which we employ to evaluate the Dodge sampling frame.

This list is matched to the Dodge construction project frame

and is used to provide an estimate of frame undercoverage.

A questionnaire is mailed to owners of all sampled

projects that are about to be started (according to information from Dodge). Initially, respondents are asked to report

total construction cost and architectural, engineering, and

miscellaneous costs. The value put in place is collected

monthly until the project is completed. Data are collected

by mail and phone by the NPC staff. Data are keyed and

sent to headquarters for analysis and processing. Edits are

performed to ensure consistency between the total construction cost and the sum of the monthly value put in place

data. Information is imputed to compensate for nonresponse. Estimates also are adjusted to compensate for

undercoverage in the sampling frame.

Monthly and annual estimates of VIP by type of construction are produced at the National level. Also provided

annually are data on monthly progress from start to completion. Preliminary estimates of monthly value put in place

are produced with revisions the first and second following

months and a final revision at the end of the annual

processing.

The monthly estimates of VIP are seasonally adjusted

and constant dollar estimates also are produced. See the

section below for more information on indexes.

Farm Nonresidential

The Department of Agriculture compiles an annual estimate of farm nonresidential construction. This number is

released in the middle of the following year and current

estimates are forecasted by the International Trade Administration. A monthly series is produced from the annual

series by using a benchmarking procedure. The annual

series provides the benchmarking levels and other components of VIP are used to provide the month-to-month

changes.

Public Utilities

Telecommunications. In a monthly telephone survey,

major phone companies report construction expenditures

to us. Annually, we obtain construction levels for all phone

companies from the U. S. Telephone Association. Annual

construction for cable companies is obtained from an

industry source. The monthly phone company data are

combined with the annual data for small phone companies

and cable companies to get annual estimates of telecommunication. Monthly estimates are produced by benchmarking the monthly construction of major phone companies to

the annual totals for telecommunication.

Railroads. Major railroads are required to report construction expenditure data to the Surface Transportation Board

(STB) each quarter and we access those data. The quarterly data are converted to a monthly series by benchmarking and interpolation. The data reported by the major

companies to the STB include items that are out of scope.

Annually these companies report detailed expenditure data

to the STB that allow us to compile a correct annual total of

construction expenditures. We benchmark the monthly

series to the corrected annual totals.

Electric light and power. We develop annual VIP for

electric light and power from Federal Energy Regulatory

Commission (FERC) data. Monthly estimates are formed

by benchmarking trends obtained from progress of a small

sample of electric utility projects to the annual VIP for

electric light and power.

U.S. Census Bureau

35
Gas. The American Gas Association publishes data on

total construction for all gas companies, which include the

cost of land and equipment. To this total we apply an

adjustment factor to eliminate land and equipment from the

data.

The adjustment factor for the total construction from the

American Gas Association is derived annually from data

from FERC. We use its data to derive the annual change in

value for buildings and outside plant and the annual

change in value for total assets for large gas companies.

The ratio of the two annual changes is the factor applied to

the American Gas Association’s total gas company construction.

The annual estimate for gas company construction is

converted to a monthly series by benchmarking trends

obtained from progress of a small sample of gas utility

projects to these annual estimates.

Petroleum pipelines. From construction expenditure data

on file at FERC, we compile an annual total of VIP. Trends

obtained from progress of a small sample of petroleum

pipeline projects are benchmarked to these annual totals to

provide a monthly petroleum pipelines series.

Alternate data collection methods under consideration. For the Electric Light and Power, Gas, and Petroleum Pipelines series, data collection through a sample

survey of companies is being considered. The monthly

estimates derived from this data collection could be benchmarked to the annual estimates of value put in place

currently being compiled from regulatory agencies. For the

Railroads series, there are plans to begin collecting monthly

data directly from the major railroad companies which do

not report to us.

State and Local Government Construction

Data for state and local government construction are

collected by a Construction Progress Reporting Survey

that is very similar in design to the survey for private

nonresidential construction. The sampling frame is purchased from F. W. Dodge and is periodically evaluated for

quality of coverage. The last evaluation was done in 1988.

A sample of state and local governments were contacted

and asked to provide a list of construction project awards.

These lists were matched to the Dodge project frame, and

projects not found on the Dodge frame contributed to the

undercoverage factor.

Initially, data are collected on the project owner’s estimate of total construction cost and architectural, engineering, and miscellaneous costs. Value put in place data are

collected monthly.

Edits are performed to ensure consistency between the

total construction cost and the sum of the monthly value put

in place data.

We benchmark our estimates of state and local construction to state and local government construction data available from the Annual Survey of Government Finances

which is conducted by the Governments Division of the

Census Bureau.

Federal Government Construction

Monthly reports are received from government agencies, including branches of the military, which account for

almost all of the federal construction. The reports are

tabulated to arrive at monthly totals which are detailed by

type of construction.

MANUFACTURED (MOBILE) HOME PROGRAM

Sampling Units, Sampling Frame, and Frame

Coverage

The Department of Housing and Urban Development

(HUD) has a contract with the National Conference of

States on Building Codes and Standards (NCSBCS) to

regulate the manufacture of mobile homes. NCSBCS contracts with inspection agents to inspect mobile homes in

the manufacturing plants and produce a list of all units with

the name of the dealer who will receive the finished unit.

These lists provide the sampling frame from which we

select a sample for our Survey of New Manufactured

(Mobile) Home Placements. All mobile homes manufactured in the United States are inspected by HUD agents so

this sampling frame has complete coverage.

Data Collection and Processing

Data are collected each month through telephone interviews conducted by NPC staff. Sampled units stay in the

survey until they are placed on a mobile home site for

occupancy. If a unit is transferred to another dealer, we

continue followup on the unit with the new dealer. Other

data collected are the sales price of sold units and selected

characteristics of the unit. Data are keyed in NPC and

transmitted to headquarters for review, correction, and

tabulation. Data are imputed for units where response data

are not available.

Estimation and Publication

Estimates are formed by weighting data for sampled

units by the inverse of the unit’s probability of selection.

National estimates of mobile homes placed, sales price of

units sold, and units in dealers’ inventories are provided

quarterly. State and selected metropolitan area estimates

U.S. Census Bureau

36
are produced annually along with estimates for selected

characteristics. We also publish monthly data compiled by

NCSBCS on shipments of mobile homes from manufactures.

Special Features

Response rates for this survey have deteriorated over

time. The sales price estimates have a higher rate of

nonresponse than other items since some dealers consider

the price confidential. We are trying to improve these

response rates.

ECONOMIC CENSUS: CONSTRUCTION SECTOR

Sampling Units, Sampling Frame, and Frame

Coverage

Data on the construction sector of the economy are

collected as part of the economic census in years ending in

2 and 7. All establishments of multiunit companies and

large single-unit establishments with employees that are

engaged in construction are included. A sample of small

single-unit construction establishments with employees is

taken and data from the Internal Revenue Service is used

for construction establishments with no employees. There

are about 650,000 construction establishments with employees and over a million with no employees. About 200,000

of the employer establishments are included in the census.

The sampling frame, derived from information provided

by the Internal Revenue Service and the Social Security

Administration, is the Standard Statistical Establishment

List (SSEL) maintained by the Bureau for economic surveys and censuses. The SSEL is regularly updated for new

establishments, purged of discontinued establishments,

and corrected for company splits, mergers, and other

changes. This frame provides very good coverage of

construction establishments.

Data Collection and Processing

Data are collected using a mail questionnaire with

several mail followups and a telephone followup of large

establishments. Information on number of employees, payroll, receipts, cost of materials, work subcontracted out,

kind of business, assets, depreciation, and other items is

collected.

Followup mailings are supplemented with newly formed

establishments. Questionnaires are returned to our processing center where they are reviewed and keyed. The

keyed data go through a complex edit and are entered into

a database. Analysts in headquarters review tabulated

data. Respondents are contacted during either the processing center or the headquarters operations to correct or

clarify the data. Data are imputed for establishments that

do not report or give incomplete information.

Estimation and Publications

Estimates are formed by multiplying response data by

the selection weight. Estimates from the 1997 Economic

Census will be produced at the National and state levels.

In the past, estimates also were produced for selected

metropolitan areas. All estimates are for the year for which

the census was conducted.

Special Features

Data from the construction sector of the economic

census are compared to annual Value Put in Place estimates to identify coverage problems in the latter for

possible use as a benchmark. However, there are problems with comparing census data with VIP estimates.

Only about two-thirds of ‘‘construction,’’ as defined in

VIP, is actually done by the construction industry as defined

by the census. Examples of construction work done outside the industry are architectural and engineering design,

construction management (added for 1997), force-account

construction, and secondary construction (installations done

by employees of a hardware store, for instance). Also,

outside the scope of the census is work done by nonemployers and a significant amount of construction work done

in the underground economy. Further problems involve

how one calculates ‘‘net’’ construction in the census. In

developing comparisons between VIP and census data,

estimates and assumptions have to be made for these

differences.

CONSTRUCTION PRICE INDEXES

Bureau Produced Indexes

New single-family houses. Data from SOC are used to

produce two versions of a price index: an index of units

sold and an index of units under construction. Both indexes

are produced from a hedonic regression model which

relates the sales price or contract value of a house to its

characteristics. In particular, sales price or contract value is

the dependent variable and characteristics such as square

feet in the unit, geographical location, number of fireplaces,

and parking facility are independent variables. Indexes for

detached houses are produced regionally and for attached

homes at the national level. The final National indexes are

a weighted average of the regional indexes for detached

units and the National index of attached units. The index of

U.S. Census Bureau

37
units sold is produced quarterly and annually at the National

level and annually at the regional level. The index of units

under construction is produced at the National level monthly.

The single-family index of units under construction is

used to deflate current dollar estimates of new residential

construction VIP. From time to time the questionnaire for

SOC is revised to collect additional characteristic data for

possible use in the index.

New multifamily units. The BEA has designed a multifamily index using data from SOC and the Multifamily VIP

Survey and this index is produced each year at the Census

Bureau. This index is also a hedonic regression model

where the dependent variable is construction cost per unit

and the independent variables are average square feet in

the unit, number of bathrooms, parking structure, etc.

Use of Indexes From Outside the Census

Bureau

Besides the indexes discussed above, we use the

following construction cost and price indexes from outside

sources as deflators of various categories of the Value Put

in Place series. They are:

• Turner Construction Company

• Federal Highway Administration—Composite

• Bureau of Reclamation

• Turner Telephone Plant

• Handy Whitman: Electric, Utility Building, Gas, Water

Further Information About Census Bureau

Construction Indexes

More information about indexes is contained in the

appendixes of our reports. Information concerning the

single-family price indexes is found in an appendix to the

March issue of the New One-family Houses Sold Report

(C25), Appendix A: Description of Price Index. Information

on the various indexes used to deflate different components of the VIP estimate is found in the May issue of the

Value of Construction Put in Place (C30), Appendix D:

Adjustments for Seasonal Variations and Cost Change.

U.S. Census Bureau

38
Appendix A.

Conference Agenda

Construction Statistics Data Users’ Conference

Embassy Suites Hotel

1250 22nd Street, N.W., Washington, DC

October 28, 1997

Agenda

8:30-9:00 a.m. Registration

9:00-9:15 Welcoming Remarks

Frederick T. Knickerbocker,

Bureau of the Census

9:15-10:30 New Residential Construction

Michael Carliner,

National Association of Home Builders

10:30-10:45 Break

10:45-12:00 Residential Improvements and Repairs

Kermit Baker,

Harvard University

12:00-1:30 p.m. Lunch

Luncheon Speaker

Frederick T. Knickerbocker,

Bureau of the Census

1:30-2:45 Value Put in Place Program

Robert P. Parker,

Bureau of Economic Analysis

2:45-3:00 Break

3:00-4:15 Economic Census: Construction Sector

Manuel D. Gutierrez,

Kohler Company

4:15-4:45 Concluding Remarks

Thomas L. Mesenbourg,

Bureau of the Census

Appendix A A-1

U.S. Census Bureau
Appendix B.

Registered Participants

Gopal Ahluwalia, National Association of Home Builders’, Washington, DC

Stephen H. Andrews, Bureau of the Census, Washington, DC

Kermit Baker, Joint Center for Housing Studies, Cambridge, MA

Eric S. Belsky, Joint Center for Housing Studies, Cambridge, MA

David W. Berson, Fannie Mae, Washington, DC

Will Biddle, National Association of Home Builders’ Research Center, Upper Marlboro, MD

Doug C. Bond, Bureau of the Census, Washington, DC

Hyo-SubByun, Korean Statistical Agency, Washington, DC

Michael S. Carliner, National Association of Home Builders, Washington, DC

Robert E. Chapman, National Institute of Science and Technology, Gaithersburg, MD

Cynthia Z.F. Clark, Bureau of the Census, Washington, DC

Jeanine Conwell, Equipment Manufacturers Institute, Chicago, IL

John Curtis, Associated General Contractors of America, Washington, DC

David E. Czechowski, Portland Cement Association, Skokie, IL

David D’Alessandris, National Association of Realtors, Washington, DC

Paul R. D’Armiento, G P & V Associates, Arlington, VA

Judy M. Dodds, Bureau of the Census, Washington, DC

Dennis K. Duke, Bureau of the Census, Washington, DC

Timothy Dunne, Bureau of the Census, Washington, DC

Stanley F. Duobinis, National Association of Home Builders, Washington, DC

Randy Eager, General Management Technologies, Pittsburgh, PA

Frederick J. Eggers, U.S. Department of Housing and Urban Development, Washington, DC

Mary E. Fenelon, McGraw-Hill, Washington, DC

James T. Fergus, Federal Reserve Board, Washington, DC

Dwight K. French, Energy Information Administration, Washington, DC

Peter J. Fronczek, Bureau of the Census, Washington, DC

John H. Gates, Bureau of the Census, Washington, DC

John L. Goodman, Jr., National Multi Housing Council, Washington, DC

Brian V. Greenberg, Bureau of the Census, Washington, DC

Heather Grob, Center to Protect Workers’ Rights, Washington, DC

Anita Gryan, F.W. Dodge, Lexington, MA

Manuel D. Gutierrez, Kohler Company, Kohler, WI

John C. Haltiwanger, Bureau of the Census, Washington, DC

Shannon Hendrickson, Associated Builders and Contractors, Rosslyn, VA

Patricia L. Horning, Bureau of the Census, Washington, DC,

Susan L.Hostetter, Bureau of the Census, Washington, DC

Linda P. Hoyle, Bureau of the Census, Washington, DC

Joseph J. Huesman, Bureau of the Census, Washington, DC

David A. Johnston, Design-Build Institute of America, Washington, DC

Mel Jones, Statistics Canada, Ottawa, Canada

Appendix B B-1

U.S. Census Bureau
Michael J. Kennamann, Caterpillar, Peoria, IL

James Kennedy, Federal Reserve Board, Washington, DC

Kim Kennedy, Cahners Economics, Newton, MA

James H. Kerr, F.W. Dodge, Washington, DC

Frederick T. Knickerbocker, Bureau of the Census, Washington, DC

Anne Lawson, Bureau of Economic Analysis, Washington, DC

Patrick MacAuley, Department of Commerce, ITA, Washington, DC

Kathleen McDonald-Johnson, Bureau of the Census, Washington, DC

Duane T. McGough, Washington, DC

Thomas L. Mesenbourg, Jr., Bureau of the Census, Washington, DC

William K. Mittendorf, Bureau of the Census, Washington, DC

Edward D. Montfort, Bureau of the Census, Washington, DC

Carol Moylan, Bureau of Economic Analysis, Washington, DC

Robert Murray, McGraw-Hill, Lexington, MA

Frank Nothaft, Freddie Mac, McLean, VA

Sue Okubo, Bureau of Economic Analysis, Washington, DC

John G. Olsen, Bureau of Labor Statistics, Washington, DC

Calvin S. Oren, Construction Market Data Group, Greenbelt, MD

Adam Pagnucco, Building and Construction Trades Dept., AFL-CIO, Washington, DC

Robert P. Parker, Bureau of Economic Analysis, Washington, DC

Charles P. Pautler, Bureau of the Census, Washington, DC

Philip Porado, Housing Market Report/CD Publications, Silver Spring, MD

Lee Price, Department of Commerce, Washington, DC

Barry A. Rappaport, Bureau of the Census, Washington, DC

Roderick Rennison, National Institute of Standards & Technology, Gaithersburg, MD

Brooks Robinson, Bureau of Economic Analysis, Washington, DC

Cindy Robinson, National Institute for Occupational Safety and Health, Cincinnati, OH

George A. Roff, Jr., Bureau of the Census, Washington, DC

G. Daniel Sansbury, Bureau of the Census, Washington, DC

Ronald J. Sepanik, U.S. Department of Housing and Urban Development, Washington, DC

Robert J. Sheehan, Regis J. Sheehan and Associates, McLean, VA

Chris Swann, WEFA Group, Eggyston, PA

Vern Totten, Statistics Canada, Ottawa, Canada

David A. Vandenbroucke, U.S. Department of Housing and Urban Development, Washington, DC

Antoinette Vnuk, Construction Industry Manufacturers Association, Milwaukee, WI

Daniel H. Weinberg, Bureau of the Census, Washington, DC

Barbara T. Williams, Bureau of the Census, Washington, DC

David Yockel, International Brotherhood of Electrical Workers, Washington, DC

Karl Zandi, Regional Financial Associates, Inc., West Chester, PA

U.S. Census Bureau

B-2 Appendix B
Appendix C.

Census Bureau Contacts

Contact Phone E-mail

New Residential Construction Dan Sansbury 301-457-1321 G.Daniel.Sansbury@Census.GOV

Residential Improvements and Repairs Joe Huesman 301-457-4822 Joseph.J.Huesman@Census.GOV

Value of Construction Put in Place George Roff 301-457-1605 George.A.Roff.Jr@Census.GOV

Construction Sector Pat Horning 301-457-4680 Patricia.L.Horning@Census.GOV

Manufactured (Mobile) Homes George Roff 301-457-1605 George.A.Roff.Jr@Census.GOV

Appendix C C-1

U.S. Census Bureau