In July, new housing construction costs increased by 2.3% compared to the same month last year, according to the most recent estimates from the National Statistics Institute (INE). However, this is a year-on-year value 0.5 percentage points (p.p.) lower than in June and May (2.8%). It should be noted that in July 2022, the year-on-year increase was much higher: 12.9%.
“In July, the year-on-year variation in the New Housing Construction Cost Index (ICCHN) stood at 2.3%, a rate 0.5 pp lower than that observed in June. The prices of materials showed a variation of -1.5% (-0.7% in the previous month) and the cost of labor increased by 7.7%, 0.2 p.p. less than in June”, reads the bulletin released this Friday (September 8, 2023) by INE.
The institute states that “the cost of labor contributed with 3.2 p.p. (as in the previous month) to the formation of the ICCHN year-on-year rate of change and materials with -0.9 p.p. (-0.4 p.p. in June)".
Which materials have become more expensive?
According to INE, “among the materials that most negatively influenced the aggregate price variation are mild and galvanized steel sheet and bitumen, which showed decreases of around 25% year-on-year, and energy products, steel for concrete and heavy and light profiles and covering, insulation and waterproofing materials, all with reductions of around 15%”.
“In the opposite direction, cement, ready-mixed concrete and paints, primers, undercoats and varnishes stood out with year-on-year growth of around 10%”, he adds.
With regard to the chain variation, INE highlights that the ICCHN monthly variation rate was 0.3% in July, 0.3 pp more compared to the previous month, with the cost of materials rising 0.2% and that of labor 0.4%.
“The material and labor components contributed 0.1 p.p. and 0.2 p.p., respectively, to the formation of the ICCHN monthly variation rate (-0.3 p.p. and 0.3 p.p. in June, in the same order) ”, he concludes.
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Source: Idealista
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