Data quality, concepts and methodology: Consulting engineering services price indexes

Archived Content

Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please "contact us" to request a format other than those available.

(Table 327-0007, 1997=100, annually since 1989)

Introduction

The Consulting Engineering Services Price Indexes (CEPI) measure changes in the prices of services provided by consulting engineers. These services encompass advisory and design work as well as, construction or project management. They are provided for many types of projects (fields of specialization), and to both Canadian and foreign clients. Price indexes are published for ten fields of specialization as well as for regional, domestic, and foreign markets.

Characteristics

General

These indexes are produced from annual wage and financial data collected from a judgement sample of consulting engineering firms in Canada (North American Industrial Classification System 54133). The total price indexes (column A) are calculated as the product of wage rate and realized net multiplier indexes (mark-up). The composition of the total price index reflects how firms structure their service contracts. The wage rate and realized net multiplier indexes are published separately in Columns B and C. These indexes provide information on the source of change in the prices of consulting engineering services over time.

Pricing information used

Changes in wage rates

The wage rate indexes are produced from data on the average of annual percentage changes in salaries and wage rates paid to those whose time is charged directly to consulting engineering projects. These indexes measure changes over time in the value of the wage component of contracts for engineering services.

Realized net multiplier

Realized net multipliers are calculated as the ratio of operating revenue from consulting engineering projects at fiscal year-end to project-related expenses. The multiplier indexes measure changes in the profitability of consulting engineering activities in each market and field of specialization.

Derivation of weights

Weights are derived from fee income data from the Annual Survey of Engineering Services that is conducted by Services Industries Division. The total fee income for each field of specialization is prorated by region using the provincial distribution of new construction expenditures from the Survey on Capital and Repair Expenditures that is conducted by Investment and Capital Stock Division. Index weights are revised every two years so that price indexes reflect changes in the relative importance of consulting engineering activity in each field of specialization and region over time.

Index formula

At the most detailed level, the indexes are calculated as chained, unweighted geometric averages of the data received from respondents. With the exception of indexes for the industrial fields of specialization, a Chain-Laspeyres index formula is used to calculate indexes at the total region, Canada and all-market levels. The index for each industrial field of specialization is calculated at the Canada level only using a geometric mean formula. Composite indexes for industrial services by region differ because the mix of industrial projects varies from one regional market to another.

Revisions

The most recent two years of published indexes are subject to revision.

For further information, contact Dissemination Unit at telephone: 613-951-4550, toll-free: 1-888-951-4550, fax: 613-951-3117, e-mail: ppd-info-dpp@statcan.gc.ca, Producer Prices Division, Statistics Canada, Ottawa, Ontario, K1A 0T6.