The BER Building Cost Index is an analysis of accepted tender prices and is published on a quarterly basis. The index was developed in 1966 by Mr Doug Brook, a well known quantity surveyor. The index is based on information obtained from participating quantity surveyors who regularly supply the BER with data extracted from the bills of quantities of actual accepted tenders in both the private and public sectors.

The BER Building Cost Index is compiled by analysing current price movements of 22 selected representative cost components that are common to all buildings relative to the prevailing base prices in April 1970. A weight is accorded to each item based on considerations such as basic design criteria which may vary from the simplest one of the fundamental ratio of light or window area to floor area to the more complicated criterion of a predetermined floor loading in respect of the ratio of formwork, steel and concrete in the selected floor slab component. In order to ensure comparability, certain adjustments in the calculation process are made, for example, amounts for preliminary and general are adjusted to the 5% level of the contract amount. The index is compiled on a national as well as a regional basis and the quarterly database covers the period 1962 to 2010.

There are many users of the BER Building Cost Index, inter alia, professional quantity surveyors, building contractors and estimators, engineers, insurance brokers, loss adjusters, real estate valuers and members of the legal fraternity.

To sum up, the BER Building Cost Index which is based on tender prices reflects the ex ante output prices of building contractors and includes builders’ input costs (labour, materials, plant and fuel), their profit mark-ups and allowances for contingencies. It should be pointed out that movements in this index are sensitive to fluctuations in the business cycle. This happens because the degree of competition in tendering intensifies during economic recessions – building contractors are obliged to trim their profit margins in times of slack building demand, and vice versa in growth phases in the economy.

Professional users of the BER Building Cost Index often require forecasts of building and other building related input costs. The BER, in conjunction with Medium–Term Forecasting Associates publish the Report on Building Costs. This report contains a five year, monthly forecast of, inter alia the BER Building Cost Index, JBCC CPAP indices and building and construction materials prices. To subscribe, click below on the Report on Building Costs.