What is the CPT Cost Index?

Published: 01-10-2013

Faced with a set of public indices which provided an unsatisfactory picture of industry costs, CPT decided in 2003 to start compiling an industry cost index of its own. Using figures supplied by volunteer member companies in each region, the index tracks movements in operators’ key costs and combines them to give an overall figure for changes. 

The index is designed to be appropriate for use in contract price negotiations.

Providing the volunteers keep supplying their numbers, the index will be published twice a year. Historic reports will be accessible from this page, giving an invaluable picture of industry cost movements. Informal guidance from the Office of Fair Trading lays down conditions on the compilation and the use of the index:

  • The index should be made publicly available to market participants

  • The index should be for benchmarking purposes

  • The index should not have the result of removing uncertainties with regard to the behaviour of market participants

  • The index must not be collated more than twice a year and must be published on the CPT website so that everybody can see it

  • The number of firms supplying information for the index should be large enough so that other companies cannot identify the contributions of the individual operators

  • The index must not be used to monitor competitors' actions

  • Anonymity must be preserved through (i) the use of a third party consultant to calculate the index and (ii) the fact that neither the CPT nor its members will have access to the raw data

  • Information on prices and/or output must not be exchanged

  • The index must not highlight the levels of the variables themselves, but only the changes in the levels of the variables

  • The data used to compile the index must be historic, not prospective;

  • CPT must not require its members to use the index

  • CPT must emphasise to its members that they must not coordinate their prices by way of reference to the index or otherwise

Past and present indices can be viewed here

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