Base year
The term 'base year' refers to the year that is the starting point for a series of years in an economic or financial index. It can be used for comparing business activities, economic growth, measuring inflation and so on across a number of years.
It is usual for the base year to be set to an arbitrary level of 100. For example, if the base year is set as 2014:
- 2014: 100
- 2015: 102.5
- 2016: 107
This simple index series shows a growth rate in the first year of 2.5%, and of 7% between the first year and the third year.
The base year is a key element of financial analysis used to calculate how much a particular measure changes from one time period to the next. The equation for calculating the growth rate is:
(Current year - Base year) / Base year
Using the figures above:
(107 - 100) / 100 = 7%
This might be used for example to measure company performance over a period of time. Contractors can also use a base year to demonstrate percentage change in work won over a set period.
For a more precise index, a 'base month' can be set instead.
Within construction contracts, the 'base date' is a reference date from which changes in conditions can be assessed. It sets the reference date from which the conditions under which the tender was prepared are considered to have been known by the contractor and so are properly reflected in their price. If specified conditions change before the contract is implemented, then the contract may be adjusted to reflect this.
For more information see: Base date.
[edit] Find out more
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
Quality Planning for Micro and Small to Medium Sized Enterprises
A CIOB Academy Technical Information sheet.
A briefing on fall protection systems for designers
A legal requirement and an ethical must.
CIOB Ireland launches manifesto for 2024 General Election
A vision for a sustainable, high-quality built environment that benefits all members of society.
Local leaders gain new powers to support local high streets
High Street Rental Auctions to be introduced from December.
Infrastructure sector posts second gain for October
With a boost for housebuilder and commercial developer contract awards.
Sustainable construction design teams survey
Shaping the Future of Sustainable Design: Your Voice Matters.
COP29; impacts of construction and updates
Amid criticism, open letters and calls for reform.
The properties of conservation rooflights
Things to consider when choosing the right product.
Adapting to meet changing needs.
London Build: A festival of construction
Co-located with the London Build Fire & Security Expo.
Tasked with locating groups of 10,000 homes with opportunity.
Delivering radical reform in the UK energy market
What are the benefits, barriers and underlying principles.
Information Management Initiative IMI
Building sector-transforming capabilities in emerging technologies.
Recent study of UK households reveals chilling home truths
Poor insulation, EPC knowledge and lack of understanding as to what retrofit might offer.
Embodied Carbon in the Built Environment
Overview, regulations, detail calculations and much more.
Why the construction sector must embrace workplace mental health support
Let’s talk; more importantly now, than ever.
Ensuring the trustworthiness of AI systems
A key growth area, including impacts for construction.