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Construction costs rise in December – but are slowing down

New housing construction costs increased by 1.8% year-on-year, 0.6 percentage points less than in November (2.4%).



In December 2023, new housing construction costs increased by 1.8% year-on-year, 0.6 percentage points (p.p.) less than in the previous month (2.4%). Material prices changed by -2.2% (-1.7% in the previous month) and labor costs increased by 7.5%, 0.7 percentage points less than in November. At issue are provisional data released this Friday (February 9, 2024) by the National Statistics Institute (INE).

“The cost of labor contributed with 3.1 p.p. (3.4 p.p. in the previous month) to the formation of the year-on-year rate of change in the New Housing Construction Cost Index (ICCHN) and materials with -1.3 p.p. (-1.0 p.p. in November)”, concludes the institute.


According to INE, among the materials that most negatively influenced the aggregate price variation are coatings, insulation and waterproofing, which fell by around 20%, steel for concrete and heavy and light profiles and mild and galvanized steel sheet, with a reduction of around 15%, and the consumption of energy products, with a decrease of around 10%.

“In the opposite direction, ready-made concrete and sanitary articles stood out with year-on-year growth of around 10% and cement, paints, primers, undercoats and varnishes with around 5%”, indicates the national statistics office.

With regard to the chain variation, the ICCHN's monthly variation rate was -0.6% in December, 1.7 p.p. lower than in November, with the cost of materials falling by 0.8% and the cost of labor work 0.4%.


Regarding the average annual variation of the ICCHN, it was 3.9% in 2023 (average variation of 12.2% in the previous year). “The materials and labor indices registered average annual increases of 0.9% and 8.1%, respectively (16.7% and 6.3% in 2022, in the same order)”, concludes INE.


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Source: Idealista

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