Informations Rapides · 29 March 2024 · n° 86

In Q4 2023, the “Cost-of-Construction Index” rose by 5.36% over a year Construction cost index - fourth quarter 2023

Definition

The “Cost-of-Construction Index” (CCI) is a quarterly index, with reference 100 in the fourth quarter of 1953, the date of its creation. CCI measures the production price change of new dwellings – excluding communities such as care homes, workers’ hostels, halls of residence or prisons. It is calculated by INSEE in collaboration with the Ministry of ecological Transition. It is published in the Journal Officiel at the end of the third month following the quarter under review.

Although established by usage, the words “Cost-of-Construction Index” make a misnomer since it is a producer price index (hence not a cost index), based on the observation of construction contracts between the clients and the firms delivering the building works, excluding other components that enter into the global cost of purchasing (land cost, costs associated with the Development of building projects, financing costs, etc.). The cost of construction itself is apprehended by other indices, such as the producer cost index in construction of buildings (group 41.2) calculated and published by INSEE.

Methodological information is available in the Documentation tab of this publication.

Uses

Under the 2014-626 Act of 18 June 2014 (Article 9) which amends section L. 145-34 of Commercial Code, two indices can be used for the revision of commercial and other tertiary activities rents:

- the commercial rent index for trade and craft activities;

- the tertiary activities rent index for activities other than trade and craft activities.

The CCI is no longer used for revising commercial rent contracts.

Variations in CCI can be compared to or reconciled with indicators of cost of production factors, such as the cost of production index in construction of buildings (group 41.2) published monthly by INSEE. Moreover, as regards the maintenance and improvement of housing, “IPEA” is the relevant production price index.

The CCI is also used for compiling the volume-price breakdown in the national accounts (for the branch of activity “Construction of Buildings”).

Next issue: end of June 2024.