Developments between April and May 2019

The Construction Cost Index for multi-dwelling buildings rose by 0.6 percent between April and May 2019. In the corresponding period in 2018, the Index increased by 0.7 percent. Contractors’ costs, which account for more than 82 percent of the Construction Cost Index, increased by 0.7 percent, mainly due to increased costs for wages and salaries.

Building material costs increased by 0.2 percent. In the group ‘building materials’, the cost of other building materials rose most, by 1.2 percent. The cost of floor material, iron and steel including reinforcement steel, white goods and concrete rose by between 0.2 percent and 0.4 percent. The cost of wood products, woodwork, plumbing material and electric materials decreased, while the cost of material for painting remained unchanged.

All costs within contractors’ other groups increased. Wages and salaries rose by 1.8 percent. Costs in the group ‘transport, fuel and electricity’ and machinery costs rose by 0.5 percent respectively. Contractors’ other costs increased by 0.3 percent.

Over the past month, investor costs, which consist of interest and credit costs, costs for plans and central administration costs, increased by 0.3 percent.

Developments between May 2018 and May 2019

The Construction Cost Index for multi-dwelling buildings increased by 4.1 percent between May 2018 and May 2019. Contractors’ costs rose by 3.5 percent. This increase in contractors’ costs led to an increase of 2.9 percentage points for the total index in the same period.

The group ‘transport, fuel and electricity’ increased the most, by 5.3 percent, among contractors’ costs. Within that group, the cost of electricity increased by 12.5 percent, while the costs for diesel oil and transport increased by 5.7 percent and 3.4 percent respectively.

Building material costs increased by 4.6 percent. Iron and steel, including reinforcement steel and material for painting, accounted for the largest price increases in the building materials group, 10.8 percent and 8.5 percent respectively. Wood products rose by 7.0 percent, while other building materials increased by 6.4 percent. Costs in other building material groups also rose, but not to the same extent. Contractors’ other costs, machinery costs, wages, and salaries rose by between 1.9 percent and 3.3 percent.

Investor costs increased by 6.7 percent on an annual basis. This increase was mainly due to higher interest expenses.