New Housing Construction Costs Rose 6.5% in June

August 10, 2021 – Ana Custódio

Construction costs rose by 0.4 percentage points compared to the previous month.

According to the New Housing Construction Costs Index, released today by the National Statistics Institute, new housing construction costs rose by 6.5% year-on-year, up 0.4 percentage points from the previous month.

This increase was due to an acceleration (0.8%) in materials prices. The price of materials and the cost of labour both rose by 6.5% y-o-y.

According to the INE, the estimated year-on-year change in the Construction Costs Index for New Homes reached 6.5% in June, up 0.4% m-o-m. In June, material prices increased by 6.5% (5.7% in the previous month). Labour costs also increased by 6.5% (6.6% in May).

The analysis indicates that labour costs contributed 2.7% to the yearly increase to the New Housing Construction Costs Index (NHCI), while the materials component contributed 3.8%.

The HNCI was up 1.0% q-o-q in June. Materials costs increased by 0.5% and the cost of labour by 1.7%.

Labour and materials contributed 0.3% and 0.7% respectively to the monthly change in the construction cost index of new housing.

Translation: Richard D K Turner