Lower material prices led to a fall in the Construction Price Index in Q2 2023
Text Mark Taylor
Photo Andrei Chertkov
According to data released by Statistics Estonia, in the second quarter of 2023, the Construction Price Index decreased by 0.5 per cent compared with the first quarter of this year, but increased by 6.8 per cent compared to the second quarter of 2022.
The Construction Price Index expresses the change in construction expenditures taking into consideration the price changes of three basic inputs: labour force, building machines, and building materials. The calculation of the construction price index covers four groups of buildings: detached houses, apartment buildings, industrial buildings, and office buildings.
“In the second quarter of this year, compared with the second quarter of 2022, the Construction Price Index was primarily influenced by the rising cost of building materials, which accounted for 55 per cent of the total index rise. Compared with the first quarter of 2023, the labour force was 0.6 per cent more expensive, the cost of using building machines rose by 1.1 per cent, while the price of building materials fell by 1.3 per cent,” said Ülo Paulus, a leading analyst at Statistics Estonia.
The prices of wood and metal, and products made of these materials mostly continued to decline.
The Repair and Reconstruction Work Price Index also fell by 0.3 per cent compared with the first quarter of 2023, but rose by 9.1 per cent compared with the second quarter of last year.