Tender Price Index and construction cost indices in Malaysia
See how tender prices and construction costs have moved, by period, category and state. Use the movement to update an old cost plan, justify a contingency, or explain to a client why a budget has to change.
Trends is included on Pro and Max · Start free with 50 credits every month
What a Tender Price Index tells you
A Tender Price Index (TPI) tracks how the prices contractors tender for whole buildings have moved from one period to the next. It answers a question a single rate cannot: is the market as a whole dearer or cheaper than it was when this project was last priced?
An index measures movement, not ringgit. A value of 120 against a base of 100 means prices are 20% above the base period. In Caprix the Tender Price Index is quarterly, with 2016 Q4 = 100.
Tender price index or cost index?
Tender Price Index
What clients are charged for whole buildings. It moves with input costs and with the market: how much work is around and how keenly contractors are bidding. Use it for budgets and cost plans.
Cost indices
What one category of material, labour or machinery costs the builder, by state. Use them to see which inputs are driving a change and where.
The two do not always move together. Input costs can climb while tender prices stay flat in a quiet market, which is why it helps to read both.
How to update a cost with an index
To bring a cost from one period to another, scale it by the ratio of the two index values:
Updated cost = original cost × index at the new date ÷ index at the original date
For example, if a building cost RM10,000,000 when the index stood at 110, and the index for your pricing date is 121, the updated cost is RM10,000,000 × 121 ÷ 110 = RM11,000,000, a rise of 10%. These index values are illustrative; use the published figures for your periods.
Three things to watch:
- Use the same index at both ends. Do not mix a tender price index with a cost index.
- Match the period. Price to the date the work will be tendered or built, not today's date.
- Adjust for location separately. A time index does not account for the project being in a different state.
Charting an index in Caprix
- In the Chat Workspace, ask how a cost has moved, or choose Cost trends.
- Choose the trend type: the Tender Price Index, or a material, labour or machinery cost index. For a cost index, also choose the category and state.
- Set the from and to year range and select Show trend.
You get a chart of the movement with the change for each period, and you can ask follow-up questions in the same chat.
Putting the movement to work
Time procurement
Buy ahead of a rising index, or hold where prices are softening.
Justify a contingency
Back your allowance with movement in real data instead of a rule of thumb.
Explain a budget change
Show a client, in plain terms, why the figure from two years ago no longer holds.
Allow for escalation
After a building estimate, ask what escalation to allow if construction peaks at a later date.
Beyond the index
Forecast a single rate
An index tells you about a category or the market. When one item matters, a rate forecast gives low, base and high scenarios for that item from its own price history and current market signals. It is not derived from a cost index.
The economy behind the movement
Research reads official statistics from the Department of Statistics Malaysia, Bank Negara Malaysia and the Ministry of Finance alongside the Caprix Tender Price Index, state cost indices and unit rates. Where one series may influence another, it measures how strong the relationship is and how long the lead time has been.
The prices underneath
Indices summarise; rates are what you price with. Look up building material prices by state →
What it costs
| Skill | What it does | Cost | Plans |
|---|---|---|---|
| Trends | Tender Price Index or a cost index, charted | 5 credits | Pro, Max |
| Rate forecast | Low, base and high scenarios for one item | 5 credits | Pro, Max |
| Research | Official statistics, sources cited | 4 credits | Pro, Max |
| Estimate | Elemental budget rebased to your price year | 5 credits | Pro, Max |
Pro is RM99 a month with 2,000 credits, and Max is RM149 a month with 4,000. See the full plan comparison →
Questions about the Tender Price Index
What is the Tender Price Index?
What is the difference between a tender price index and a cost index?
How do I use an index to update an old cost?
Which indices can I chart in Caprix?
Can Caprix tell me what escalation to allow?
Which plan includes Trends?
Keep your budgets a step ahead of the market
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