by János Gáspár Buildecon, Hungary
Nowcasting, short forecasting the project based approach
Credit to The National Bank of England for the fan chart and Cosgrove Hall Films for Jamie and the magic torch.
The regular fan-chart of The Bank of Englands GDP forecast is perfectly honest about the challenge we all face while
putting together historical construction data and forecasts. Uncertainty is there, not only on the right, but on the left
of the dotted line as well, thanks to revisions. This post is focusing on how uncertainty surrounding the present and some
months ahead in the future could be eased with aggregated data of construction projects. This is a Hungarian example.
When it comes to construction market size expressed in value, the typical questions Statistical offices ask when they gather
the information are:
- Who invested into what (investment statistics)?
- Who built what (construction statistics)?
In both cases you have preliminary data and final data. Because of the tradeoff between timeliness (freshness) and coverage
(fullness) you have to live with limited information for a while. Final annual investment figures in Hungary become available
t+10 months, while final annual construction figures are out t+9 months, where t is latest full year. Furthermore, the scope (depth) is also subject to change, segment level breakdown (office, hotel, health,
road, railway etc.) is only available as part of the final data.
For all these reasons, Buildecon has been aiming to find a third leg which helps understand the present and to some extent
the future performance of the segments better. This research we carry out together with ibuild.info and ELTINGA is about
- systematically processing Hungarys leading construction project information database.
The ibuild.info construction project database about Hungary is something similar to the service provided by Docugroup for Austria, Germany and Switzerland, by Dodge for North-America or by Cordell for Australia and New Zealand. All of these are market based services, providing information on project level to each
(potential) stakeholder. Typically, they provide detailed information about past, ongoing and planned projects, covering not
only the parameters of the projects, but also contact information. From our viewpoint, their most important feature is that
- project databases are updated daily with incoming new information, so they are very-very timely.
Out of the ibuild.info database, our analysis focuses only on those projects which are currently (at any point in time) under
construction or were under construction (completed) from 2000 on. And the parameters of each project we use are
- Start date
- (Planned) Finish date
- Value (net construction cost)
- Function (residential, hotel, office, retail, road, railway, etc.)
- Type (new vs renovation)
- The algorithms we have created aggregate the data of individual projects to segment level indicators.
Visually, the indicators look like this: