C.7. Construction surveys
6.77. Construction is a sector with such special characteristics that compilers should consider using a single survey to respond to various information needs, notably those of trade in services between residents and non-residents and of FDI and FATS. The main reason for this is that international transactions for the construction sector are sometimes difficult to separate. For example, when a construction company provides its services through a physical presence over a long-term period (more than 12 months), but without creating a legal entity in the country of the client, and if the operations are substantial enough, then the compiler may need to consider those services as a notional institutional unit from a statistical point of view. In such a case, the corresponding international transactions will be recorded as FDI financial flows, income and position, and the data corresponding to the unit’s operations should be considered as FATS (see also section D of the present chapter). If the above-mentioned conditions are not met, the international transactions will be considered as trade in services between residents and non-residents.
6.78. By reviewing all the information obtained through a single survey, the compiler can subsequently, and coherently across surveyed firms, make decisions as how to use the data, i.e., whether to classify transactions as trade in services between residents and non-residents or FDI, and whether to use some of that information for FATS (i.e., sales and turnover; see also section D). Such a unified survey could also be used to collect additional operational data on the activities of those service providers.
6.79. To correctly compile construction data, it is particularly important to precisely identify the residence of the enterprise realizing the construction work. Indeed, a construction enterprise established in one economy may undertake the construction of projects in another economy through a subsidiary or a branch, i.e., via a direct investment relationship. In other cases, an enterprise may decide to conduct services directly from its home base. In the former case, the construction activities are regarded as the activities of foreign affiliates and the corresponding international transactions are considered to be direct investment, whereas in the latter case, they are considered the export of services. For larger projects that take more than one year, the delineation between trade in services between residents and non-residents and the activities of foreign affiliates may be difficult to establish. A number of criteria to consider are suggested in BPM6 and MSITS 2010, and are described further in chapter 14 of the present Guide. Given the difficulties in establishing a clear delineation, it may be useful, in particular for countries in which many big contractors have projects abroad, to collect all the information on their activity through a single survey, thereby providing the necessary information for compilers to distinguish between exports/imports of construction services and FDI/FATS transactions.
6.80. When classified as trade in services between residents and non-residents, construction transactions may be considered as mode 3 supply, commercial presence, or mode 4, the presence of natural persons, to account for cases involving the presence of resident workers (employed by the resident construction enterprise or self-employed) in the non-resident/host economy. It should be noted that, although mode 3 concerns, for the most part, the domestic sales of foreign affiliates, construction services for work carried out in less than one year may also be regarded as a commercial presence, according to GATS.
6.81. Although business surveys are designed to collect information on both the transactions of construction companies and those of their clients, the coverage of the latter could be more difficult in the case of construction. The services provided by the contractor are likely to be closely related to the sector of activity of the enterprise (i.e., construction). That is less true for the clients, since any household or the companies of any industry may buy construction services. In addition, information is needed on both the value of the construction project and on the inputs, in particular those bought in the country in which the project is taking place. Hence, for construction, a specific survey may be more appropriate, in particular for those economies that specialize in the export of construction.
Include page: Country experience: Italy
 See MSITS 2010, paras. 5.53-5.54.