How are the field cost indexes derived?
How are the field cost indexes derived?
Field Cost indices in construction :
Most of the information used to compile construction price indices is extracted from the supply side of the industry (i.e. from building firms, subcontractors, supply firms of materials, etc.).
-On the demand side, a variety of additional cost elements paid by the buyer are included in the price actually paid by the buyer or final owner of the product of the field operation. These include land prices, planning permit costs , taxes and connexion fees , insurance, professional fees (legal, architects, engineers), fees for real estate agents, land registry fees, etc.
-However, a peculiar aspect of construction operation that influences the compilation of construction price indices is that one construction contractor alone does not manufacture and sell the finished building or building in most cases.
-The customer (or the architect entrusted by the customer with the duty of construction supervision) typically concludes contracts with a variety of companies.
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