1

2

Economic/Construction Statistics

Contents 1. Introduction ............................................................................................................... 2

Data Gathering .......................................................................................................... 3

3. Recording characteristics .......................................................................................... 5

4. Processing Statistics ................................................................................................. 7

5. Data Imputation ......................................................................................................... 9

6. Presentation (Dissemination) of Information ........................................................... 10

1. Introduction

The present document contains the methodology used for the production of statistics of private

construction in Costa Rica.

One of the definitions of construction refers to everything that requires a project and

predetermined planning in order to be done.

Predetermined planning involves not only having construction drawings but also the authorization

by the entity in charge of managing the land; i.e. it requires a construction permit1 granted by the

municipality2. Each construction permit is considered a municipal record; construction statistics

produced by INEC result from administrative records.

The purpose of construction statistics is to provide the general public with timely, high-quality data

on private construction works (new, expansions and repairs) that have been granted with the

corresponding permit by municipalities. The main indicators are the area and the disaggregate

value by economic activity and end use.

These statistics originated in the 19th century. Tables with these statistics have been found in

annual statistical directories since 1950.

The data source used for registration of Construction Statistics is the Construction Permit issued

by all municipalities in the country as well as by district councils authorized for such purpose (81

1 Construction permit: Official written or digital authorization granted in order to commence a construction project. 2 Municipality: public institution in charge of governing and managing small or large lands at the service of the population.

3

municipalities and 8 district councils3). The permit must be approved by the municipality, and

municipal taxes must be paid in full by the interested party; these permits include solely private

sector constructions, thus excluding public infrastructure (schools, hospitals, public buildings, etc.)

and roads, bridges, aqueducts, power plants, etc.

Data Gathering

The data gathering method has changed throughout time as technology has evolved, leading to

the diversification of collection formats. The current formats are hard copies of the municipal form4,

digital municipal records5 and the Construction Permit Manager Record [Administrador de

Permisos de Construcción APC] managed by the Association of Engineers and Architects of

Costa Rica [Colegio Federado de Ingenieros y Arquitectos CFIA]. The main objective is to speed

up the process to obtain a permit for construction, expansion and enlargement of immovable

property, involving from the construction design to the municipal approval with the corresponding

payment.

53% of all municipalities use the APC format jointly with one of the remaining formats because,

although municipalities use the APC tool to assess and approve construction drawings previously

reviewed digitally by the CFIA, the approval and payment stage, which is a municipal

administrative process, is not performed in all municipalities with APC; these municipalities prefer

a manual procedure and/or other municipal computer tools.

The distribution of municipalities by format is detailed below:

3 The district councils are: Cóbano, Paquera, Lepanto, Monte Verde, Colorado, Peñas Blancas, Tucurrique and Cervantes. 4 The hard copy of the municipal form refers to a form containing basic variables (questions) aimed at requesting the construction permit, including the applicant’s identification information and main characteristics of the construction work. 5 The digital municipal record is a file containing information used to request the construction permit; this information is structured by variables in columns, and each row is considered an independent permit.

4

Table 1

Distribution of municipalities by data gathering format

(Absolute and relative data)

Format type Number of

municipalities Percentage

Only APC record 6 6.74

APC Record and Hard Copy of Municipal Form 24 26.97

APC Record and Digital Municipal Record 23 25.84

Only Digital Municipal Record 18 20.22

Only Hard Copy of Municipal Form 18 20.22

Total 89 100.00

The following table shows the format type used to request construction permits in municipalities:

Table 2

Distribution of municipalities by format type used to request construction permits,

by province

Province Only APC

record

APC Record and Hard Copy of

Municipal Form

APC Record and Digital Municipal

Record

Only Digital

Municipal Record

Only Hard Copy of

Municipal Form

Municipalities by province

San José 1 4 7 5 3 20

Alajuela 2 4 7 2 1 16

Cartago 0 2 2 2 4 10

Heredia 1 5 2 1 1 10

Guanacaste 0 2 5 3 2 12

Puntarenas 2 4 0 5 4 15

Limón 0 3 0 0 3 6

Total 6 24 23 18 18 89

Having two or three formats/procedures by which municipalities submit permits approved and paid off requires checking for duplicated records. This revision reduces the number of hard copies of

5

forms that have to be entered but does not affect initial revisions. This activity will be detailed further on.

2.1 Collection Strategies

The current collection strategy encompasses the three actions listed below:

1. Quarterly visits are paid to municipalities lagging behind the submission of information.

Hard copies of forms and digital records are collected by means of storage devices.

2. Information is sent by email. Once the reference month ends, municipalities begin sending

their permits via email.

3. APC files are downloaded through a Web Server connection. The CFIA sends an XML file

with the requested information.

3. Recording characteristics

This section presents the characteristics of the form used to grant construction permits. The

spaces contained correspond to the constitutive variables of construction statistics; therefore, the

digital format files must also contain these spaces.

3.1. Variable description

1. Location of plot of land by province, canton and district.

2. Form number: It is a successive 4-digit number. Numbering is performed by month and starts

with the number 0001 whenever the province is changed. It is part of the identification key of the

record in the database, together with the location.

3. Month and year of permit: The date encoded corresponds to the date the municipality approved

the request for a construction permit. The variable is composed of 4 digits of which the first two

stand for the month and the other two for the year.

4. Type of permit: It refers to the type of permit being requested. There are four options:

A) Construction: Construction work yet to be started.

B) Expansion: Addition to an existing construction work.

C) Repairing or remodeling: Improvement made to a construction work.

D) Demolition or earthmoving: All ground-preparation work for construction of housing

development.

5. Number of construction works: It refers to the number of construction works authorized by the

construction permit. The number of construction works may not coincide with the number of

permits, as one construction permit may approve more the one construction work, as shown

6

below: Construction of 200 houses in a housing development is encoded ‘200 construction

works’, while construction of a 400-apartment building is encoded ‘1 construction work.’

6. Intended use of construction work: it refers to the purpose of the construction work. Some of

those uses are: convenience store, housing, warehouse, mall, venue, private school, apartment

building, parking lot, religious building, plant nursery, etc. In light of construction works with

different intended uses and the difficulty of having disaggregated data to record each end use

separately, new end use codes named ‘miscellaneous’6 are incorporated to identify complex

construction works.

9. Economic activity: In this variable the economic activity for which the construction work will be

used is encoded. Encoding is performed in large groups and follows ISIC Rev.4.

10. Area: it refers to the floor area in square meters of the construction work, as long as the type

of construction work applies to this variable. In other words, whether they are constructions or

expansions. Repairing, earthmoving, and construction of concrete courtyards, walls, sidewalks,

public parking lots, septic tanks, zoos, and cemeteries, among others, are not included. The only

exceptions are pools and animal pens, as both have only floor and walls.

11. Number of stories: It indicates the number of stories or floors of the construction work.

12. Number of houses: It indicates the number of houses authorized by the construction permit. It

is usually the same as the number of construction works, except in apartment buildings.

13. Number of rooms7: It is used only when referring to houses and indicates the number of rooms

in a house; hallways, garages, bathrooms and laundry rooms are excluded.

14. Number of bedrooms: It is only used when referring to houses and indicates the number of

bedrooms.

15. Cost: It corresponds to the total cost of the construction work. It is assigned by the chief

engineer and assessed by the municipal engineer.

17. Floors: It specifies the predominant floor material. Floor types include: ceramic, polished and

wood.

18. Wall: It indicates the predominant wall material. Wall materials include concrete blocks,

prefabricated material and gypsum.

19. Roof: It specifies the predominant roof material, such as galvanized iron and roof tile.

6 Miscellaneous end uses include residential and commercial building; residential and commercial building with parking lot; administrative and commercial building; administrative and commercial building with parking lot; parking lot building. 7 Rooms: Refer to spaces in a house used for different purposes such as watching T.V., dining, cooking, welcoming guests, etc.

7

20. Use: Refers to whether the construction work is for personal use, renting or sale purposes,

or others.

21. Funding: Specifies the type of funding of the construction work. It may refer to banks,

cooperatives, mutual societies, the National Housing and Urbanism Institute8 [Instituto Nacional

de Vivienda y Urbanismo INVU], the Mortgage Housing Bank9 [Banco Hipotecario de la Vivienda

BANHVI], the National Insurance Institute10 [Instituto Nacional de Seguros INS], or others.

22. Linear meters: Refers to linear measurement of construction works that allow this type of

measurement, such as walls and infrastructure projects (sewer lines).

4. Processing Statistics

This section describes the processing of information from both hard copies of forms and digital

records.

4.1 Revision, encoding and data entry

All forms submitted to the office are reviewed. Unclear information is verified by calling the

municipal engineering office and the data provided is included. Forms are subsequently counted,

listed and organized by month, province and county. Processing of each month and province

starts with the number 000111.

Form data entry and encoding are both performed in one stage.

Regarding the APC records, although all projects processed and approved by the CFIA are

received, construction statistics only consider data on construction projects paid off and approved

by municipalities. The permit date in the APC records refers to the date on which the construction

permit was paid off. Projects lacking an especified date are considered pending.12

The APC data, including each variable, must be verified and validated upon downloading, based

on the data structure used to process digital information. Each label within APC is encoded and

assigned an established value according to the construction data records design. Lastly, these

data are added to the rest of the digital information from municipalities, combining all records in

one database to be exported to the central server through the SEC.

8 National Housing and Urbanism Institute. 9 Mortgage Housing Bank 10 National Insurance Institute 11 Hard copies of forms are organized and numbered, while digital records follow the consecutive numbering when combined with the former. 12 The time it takes municipalities to approve a project that was approved by the CFIA varies from one case to another.

8

Data verification must include ensuring information contained in the APC database is not

contained in the municipal forms or in the data records as well, as data included in records by

municipalities are occasionally processed by APC as well.

4.2 Data cleansing

Once information from the forms and permits is entered, data are revised. Data cleansing

comprises the following steps:

a. Database Revision

Revision is performed twice. Firstly, it focuses on the hard copies of forms entered at the office

and secondly, on the construction permits from digital records. The purpose of this revision is to

check for inconsistencies in permits entered, as well as verify data from digital records.

During revision, variables such as construction work floor area, construction work cost and

cadastral map number are verified.

I. Verification of Extreme Values (area and cost)

Extreme values in the area and construction cost variables are verified; the limits defining extreme

values are updated on a yearly basis using the data from the previous year.

i. Construction Work Area

For the area variable, the following minimum values are considered: 1 m2 to 35 m2, and as

maximum values: greater than 400 m2.

Additionally control in the construction area, is to verify that in "other works" no area has been

digitated. This because the works that go in this category is not measured in square meters like

for example walls and walls or are repairs.

A list of construction permits is prepared according to these specifications.

ii. Construction Cost

For the cost variable, the following minimum values are considered: ¢200,000 or less, and as

maximum values: Over ¢100,000,000. These specifications are due to how the current

construction cost behavior.

A list of construction permits is prepared according to these specifications.

9

II. Verification by Sample Size (area and cost)

Construction permits lacking an extreme value are verified by sampling.

Sample size is calculated through URS13.

A list of selected construction permits is prepared.

b. Correction of inconsistencies

The process of correcting inconsistencies starts with the lists resulting from steps I and II. On one hand, if an inconsistency is detected in the hard copies of forms (information entered), the

hard copies must be reviewed; should this revision fail to detect the inconsistency, assistance

from municipalities is requested. On the other hand, if an inconsistency comes from the digital

records, assistance from municipalities is requested, particularly from the engineering office, in

order to verify the information.

5. Data Imputation

Imputation is imperative, as not all construction permits contain information in all the variables

required. It is an automated process within the Construction Statistics System, reviewed on a

yearly basis.

Imputed variables include:

- Number of construction works

- Area of construction

- Number of stories

- Number of houses

- Number of rooms

- Number of bedrooms

- Floor material

- Wall material

- Roof material

Missing values are assigned according to the historical behavior of each variable to be imputed.

The system creates a report of imputed variables with the values assigned, for a subsequent

check.

Completion of the foregoing steps is followed by the dissemination of the construction statistics.

13 URS: Unrestricted Random Sampling

10

6. Presentation (Dissemination) of Information

Tabular data are produced, which are ultimately presented to users.

The tabulated information is organized as follows:

1. Number of Construction Works, Area (square meters) and Cost (in thousands of colones). By: Type of end use By: Province and Economic Activity 2. Number of Construction Works, Area (square meters) and Cost (in thousands of colones). By: Type of intended use By: Province, County and Intended Use 3. Number of construction works in the country (including residential and non-residential buildings) By: Number of stories By: Province and Economic Activity 4. Built houses and apartments in the country By: Number of rooms and bedrooms By: Province, County and Area Groups (square meters) 5. Constructions and expansions in the country By: Predominant material By: Province and End Use 6. Constructions and expansions in the country (including residential and non-residential buildings) By: Predominant floor material By: Province and Intended Use 7. Construction of apartments in the country By: Permit number, number of construction works, area (square meters) and cost (in thousands of colones). By: Province, County and Area Groups (square meters) 8. Number of repairs and cost (in thousands of colones) By: Type of construction work By: Province and County 9. Number of Expansions, Area (square meters) and Cost (in thousands of colones). By: Type of construction work By: Province and County 10. Number of Constructions, Area (square meters) and Cost (in thousands of colones). By: Type of construction work By: Province and County

Such is how the Construction Newsletter is created. It is published bi-yearly. The first publication

contains information from the first semester (preliminary numbers), and the second contains

11

information from the entire year (final numbers). Preliminary construction updates are made

available to users through the institution’s website on a quarterly basis.