Index linking to COPI, IOPI, etc.
The new Output Price Indices (OPI) that we have developed as part of the Office of National Statistics (ONS) new methodology for...
...estimating the output of the construction industry, were published online for the first time at the end of July 2010.
This work was carried out for the Department of Business Innovation and Skills (BIS).
The indices are produced to deflate output from current to constant prices.
Already suffering from three letter acronym overload? Well here are some four letter ones as an antidote.
The indices, and two of them in particular - COPI and IOPI, are widely used for adjusting for inflation in contracts and funding agreements in the regulated infrastructure sectors: water, rail, roads, etc.
COPI and IOPI are not really acronyms as they refer to:
- Output Price Index for New Construction: All New Construction (COPI)
- BIS Output Price Index for New Construction: Infrastructure (IOPI)
Quite how they came to be referred to as COPI and IOPI is a mystery to me as, as far as I know, they have never been called by a name with these initials.
The indices have been rebased with some methodological improvements and are now issued as 2010 series on a 2005=100 base and the previous series have been discontinued.
We have already had queries from clients and contractors who have contracts linked to the discontinued indices.
The BCIS view is that where the superseded indices are referred to in a contract, and subject to the wording of the contract, they should be used up to the latest available firm index and thereafter the new 2010 indices should be used pro-rated to the superseded indices; we have produced conversion factors to facilitate this.
We have produced a short note on this process (Guidance on the application of the new indices). This says:
- To estimate a quarterly index figure for a superseded series:
- select the appropriate quarterly index from the 2010 series;
- multiply by the conversion factor for that index; and
- round to the nearest whole number.
The new, and superseded series, are available in the BIS Construction Price and Cost Indices Online service.
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