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Methodological Note: Linked series. Construction Index (ICC)

ICC. Linked series. Methodological Note

CONSTRUCTION INDEX (ICC) FOR THE BASQUE COUNTRY. Base 2005

Linked Series. ICC. Base 2004 – ICI. Base 2005

In May 2009, coinciding with the publication of the data for the fourth quarter of 2008, the results of the ICC, Construction Index in Base 2005, were published and updated the available series, from 1989 onwards, that had been published in base 2004 up until then.

The ICC is a weighted Laspeyres index that is based on calculated fixed weights with data from the base year. As it is a fixed base index, it becomes less representative as the time increases from the base period. It is therefore convenient to perform, after a certain period of time, what is known as the change of base, a process that breaks the continuity of the previously published series of the index.

As a result, a series of continuous data in time is required to be used both for calculating predictions and analysis of the historic development of the index. It is necessary to determine a process that enables us to link the series of the index calculated until the moment when this change of base year takes place, and express all the series in the new calculation base.

In order to do so, the ICC index series base 2004 are transformed into index series with base 2005 by multiplying them by their corresponding "link coefficients". These "k" link coefficients are calculated as the quotient of the average annual value of indexes expressed in one or another base for 2005:

The coefficients used for the link of the ICC series were obtained using the comparison by quotient of the data referring to 2005.

The main characteristics of the work carried out to proceed to the change of base can be summarised as:

• The coefficients were calculated as quotient of the annual averages in order to collect the greatest amount of information possible.
• Linked series of indexes in base 2004 were published, as that ensured series of indexes for 19 years, sufficient for any type of analysis, without considering the indexes obtained using previous bases.

The ECC (Survey on the Construction Sector) was conducted from 1989 to 2003 and its absolute value were linked with the first results of the ICC in base 2003, in accordance with the following procedure:

• 1.-Obtaining multiplier to obtain EEC series indexes with average base for 2003 = 100:



Where is the average of the V variable in 2003:



• 2.-The indexes of the base 2003 EEC series until 2002 are given by:



for from the first quarter of 1989 until the fourth quarter of 2002.