requirements in 2006 to the present. Construction value data from ABS is examined for correlations with other causative factors, including inflation, exchange rate movements, commodity prices, construction activity cycles and potentially others, and normalised where appropriate. As noted in pitt&sherry (2016), this macro methodology has limited resolution and should not be expected to reveal strong relationships. However, it is useful to examine whether the limited available statistical information in this area reveals any movement in average construction costs around the time of the introduction of new standards (in 2006 and 2010). Micro Analysis To complement the top-down approach above, a second method is used to examine the evidence for real cost movements at the level of individual building elements or products, selecting a basket of those most relevant for energy performance. Working with quantity surveyors Donald Cant Watts Corke (DCWC), we document trends in elemental building costs over the period, as far as possible, from 2004 2016. Inherent challenges with this – methodology include the imperfect record of cost information, and also qualitative changes in the nature and energy performance of building elements over this period of time. To the extent possible, we have controlled for this effect by tracking cost changes for a range of product sizes/specifications, or for ratios such as cost/kW of chiller capacity. DCWC has examined their own historical records, contacted suppliers and also drawn on reference sources such as Rawlinsons to quantify how the unit costs of relevant building elements has evolved over time. Second, we have aggregated the rate of change in real elemental up to the whole building level by using cost weightings from typical commercial buildings. This approach approximates the average rate of real cost change for the basket of building products that most impact on energy performance. However, this weighted average value is not exactly the same as the learning rate, as defined above. For this, it would be necessary to isolate just the elements that actually change, or that need to change, to move a given design from, in this context, compliance with NCC2016 to compliance with the proposed performance requirements for NCC2019 and then examine the rate of change in the – weighted average cost of these elements. This approach still overlooks design changes, which the above literature and current work for the Australian Building Codes Board by – Energy Action for NCC2019 shows can be negative cost; that is, realise net cost – reductions. Further methodological details are provided in Chapters 2 and 3
requirements in 2006 to the present. Construction value data from ABS is examined for correlations with other causative factors, including inflation, exchange rate movements, commodity prices, construction activity cycles and potentially others, and normalised where appropriate. As noted in pitt&sherry (2016), this macro methodology has limited resolution and should not be expected to reveal strong relationships. However, it is useful to examine whether the limited available statistical information in this area reveals any movement in average construction costs around the time of the introduction of new standards (in 2006 and 2010). Micro Analysis To complement the top-down approach above, a second method is used to examine the evidence for real cost movements at the level of individual building elements or products, selecting a basket of those most relevant for energy performance. Working with quantity surveyors Donald Cant Watts Corke (DCWC), we document trends in elemental building costs over the period, as far as possible, from 2004 – 2016. Inherent challenges with this methodology include the imperfect record of cost information, and also qualitative changes in the nature and energy performance of building elements over this period of time. To the extent possible, we have controlled for this effect by tracking cost changes for a range of product sizes/specifications, or for ratios such as cost/kW of chiller capacity. DCWC has examined their own historical records, contacted suppliers and also drawn on reference sources such as Rawlinsons to quantify how the unit costs of relevant building elements has evolved over time. Second, we have aggregated the rate of change in real elemental up to the whole building level by using cost weightings from typical commercial buildings. This approach approximates the average rate of real cost change for the basket of building products that most impact on energy performance. However, this weighted average value is not exactly the same as the learning rate, as defined above. For this, it would be necessary to isolate just the elements that actually change, or that need to change, to move a given design from, in this context, compliance with NCC2016 to compliance with the proposed performance requirements for NCC2019 – and then examine the rate of change in the weighted average cost of these elements. This approach still overlooks design changes, which the above literature – and current work for the Australian Building Codes Board by Energy Action for NCC2019 – shows can be negative cost; that is, realise net cost reductions. Further methodological details are provided in Chapters 2 and 3
commercial-building-learning-rates-report-2017.docx