A review of the 2011 construction survey and results from the World Bank International Comparison Program

Jim Meikle

Research output: Chapter in Book/Report/Conference proceedingChapterResearchpeer-review

Abstract

[Extract] Making credible international price level comparisons is difficult. Commercial exchange rates do not necessarily reflect real differences in purchasing power between countries and a single currency convertor does not accurately represent price level differences across different components of an economy. The World Bank, through its International Comparison Program (ICP), is responsible for the production of Purchasing Power Parities (PPPs) for both national economies (Gross Domestic Product, GDP) and for sub-components of GDP for around 200 countries (see World Bank 2018a). PPPs are alternatives to market exchange rates and are intended to reflect price level differences across countries more accurately. One of the sub-components of GDP in the ICP is construction, part of Gross Fixed Capital Formation (GFCF) or investment.
The main components of GFCF are machinery and equipment, and construction. In terms of content and price levels these two are very different: machinery and equipment items are generally internationally traded and as a result are likely to have PPPs that are broadly similar to commercial exchange rates; the bulk of construction, on the other hand, is an essentially local activity and is likely to have PPPs that are markedly different to exchange rates or machinery and equipment PPPs. In poorer countries, construction price levels and, therefore, construction volumes are likely to be understated using exchange rates, while in richer countries, the opposite is often the case.
Original languageEnglish
Title of host publicationAccounting for Construction: Frameworks, Productivity, Cost and Performance
EditorsRick Best, Jim Meikle
Place of PublicationAbingdon
PublisherRoutledge
Chapter9
Pages155-180
Number of pages25
ISBN (Electronic)978-1-315-23178-5
ISBN (Print)9781138293977
Publication statusPublished - 11 Apr 2019

Fingerprint

World Bank
Price level
Purchasing power parity
Exchange rates
International comparison
Gross domestic product
Machinery
Capital formation
Fixed capital
Capital investment
Single currency
Country differences
Purchasing power
National economy

Cite this

Meikle, J. (2019). A review of the 2011 construction survey and results from the World Bank International Comparison Program. In R. Best, & J. Meikle (Eds.), Accounting for Construction: Frameworks, Productivity, Cost and Performance (pp. 155-180). Abingdon: Routledge.
Meikle, Jim. / A review of the 2011 construction survey and results from the World Bank International Comparison Program. Accounting for Construction: Frameworks, Productivity, Cost and Performance. editor / Rick Best ; Jim Meikle. Abingdon : Routledge, 2019. pp. 155-180
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Meikle, J 2019, A review of the 2011 construction survey and results from the World Bank International Comparison Program. in R Best & J Meikle (eds), Accounting for Construction: Frameworks, Productivity, Cost and Performance. Routledge, Abingdon, pp. 155-180.

A review of the 2011 construction survey and results from the World Bank International Comparison Program. / Meikle, Jim.

Accounting for Construction: Frameworks, Productivity, Cost and Performance. ed. / Rick Best; Jim Meikle. Abingdon : Routledge, 2019. p. 155-180.

Research output: Chapter in Book/Report/Conference proceedingChapterResearchpeer-review

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Meikle J. A review of the 2011 construction survey and results from the World Bank International Comparison Program. In Best R, Meikle J, editors, Accounting for Construction: Frameworks, Productivity, Cost and Performance. Abingdon: Routledge. 2019. p. 155-180