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
Reasons for using MVHR systems
6 reasons for a whole-house approach to ventilation.
Supplementary Planning Documents, a reminder
As used by the City of London to introduce a Retrofit first policy.
Introducing a circular ecomony deposit return scheme
The government makes steps towards DRS scheme for plastic bottles and cans in England and Northern Ireland.
Join forces and share Building Safety knowledge in 2025
Why and how to contribute to the Building Safety Wiki.
Reporting on Payment Practices and Performance Regs
Approved amendment coming into effect 1 March 2025.
A new CIOB TIS on discharging CDM 2015 duties
Practical steps that can be undertaken in the Management of Contractors to discharge the relevant CDM 2015 duties.
Planning for homes by transport hubs
Next steps for infrastructure following the updated NPPF.
Access, history and Ty unnos.
The world’s first publicly funded civic park.
Exploring permitted development rights for change of use
Discussing lesser known classes M, N, P, PA and L.
CIOB Art of Building 2024 judges choice winner
Once Upon a Pass by Liam Man.
CIOB Art of Building 2024 public choice winner
Fresco School by Roman Robroek.
HE expands finance alliance to boost SME house building
Project follows on from Habiko public-private place making pension partnership for affordable housing delivery.
Licensing construction; looking back to look forward
Voluntary to required contractors (licensing) schemes.
A contractor discusses the Building Safety Act
A brief to the point look at changes that have occurred.
How orchards can influence planning and development.