Producer Price Indexes

Producer Price Index for New Health Care Building Construction — NAICS 236224

With the release of data for January 2013, the Bureau of Labor Statistics (BLS) expanded the Producer Price Index (PPI) by introducing an index measuring the changes in output prices for New Health Care Building construction. This index is classified under a PPI-specific 2012 North American Industry Classification System (NAICS) code, 236224. This index appears in table 5 of the PPI Detailed Report, and also is available online through the BLS website under PPI Industry Data. January 2013 is the first month of data released for this index.

The index for NAICS 236224, New Health Care Building Construction, is the latest measure developed and published by PPI as part of its Nonresidential Building Construction (NRBC) initiative. The latest measure is in addition to: NAICS 236221, New Warehouse Building Construction; NAICS 236222, New School Building Construction; NAICS 236223, New Office Building Construction; and NAICS 236211, New Industrial Building Construction. Indexes created under the NRBC initiative yield a national weighted-average estimate of output price changes.

A health care building is defined as a structure used primarily for health care related activities. Included in this definition are hospitals, mental hospitals, infirmaries, hospital infrastructure (buildings for radiology, CT/MRI, radiation therapy, etc.), medical clinics, medical offices, medical labs, doctor and dentist offices, outpatient clinics, research labs (non-manufacturing, non-educational, or non-hospital), nursing homes, hospices, orphan homes, sanatoriums, drug clinics, rehabilitation centers, rest homes, and adult day-care centers.

BLS uses a method in which health care building models are selected from health care buildings constructed in the United States over a specified time period. These models represent the typical health care buildings being constructed in each of the four major census regions (Northeast, South, Midwest, and West). Multiple health care models were developed to accommodate regional variations in building design. The building models are described as a series of unique production elements or "assemblies" in BLS terminology. Each building assembly represents a building construction activity that can be fully defined as a unique portion of the total project. Each assembly is made up of unit-price components that define the specific type and quantity of materials, labor, and equipment necessary for the assembly’s installation.

A professional cost-estimating firm developed the building models under BLS direction. To achieve an output price, BLS combines the detailed material and installation (labor and related equipment) cost data, which are updated quarterly by the cost-estimating firm, with margin (overhead and profit) data collected monthly by BLS directly from building construction contractors. BLS aggregates output price changes captured at the assembly level each month to represent the changes in output prices for the total structure. Therefore, the BLS output indexes attempt to measure changes in the input costs for these structures, along with changes in contractor markups.

For more information on the NRBC initiative and for more details on the methodology BLS uses to develop output price indexes for nonresidential structures, please see www.bls.gov/ppi/ppinrbc.htm. For further information on NAICS 236224, please contact Frank Congelio at Congelio.Frank@bls.gov or (202) 691-7712.

Last Modified Date: February 20, 2013

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