Building Materials Cost Index is defined as an input price index which measures changes in the transaction price of building material input to the Construction process by monitoring the materials cost factor for the selected building types. It tracks movements of transaction prices of Malaysian manufactured and CIF (Cost Insurance Freights) imported building materials. Weight is used to reflect the distribution pattern of building materials, is used to reflect the distribution pattern of building materials.

The objective of the Building Materials Cost Index is to measure changes in the cost of an item or group of items from one point in time to another. A base month is chosen and usually given the cost index the value of 100, all past and future increases or decreases being related to this figure.