Construction Price Index Up 5.2%; Prices Rising Less Rapidly

According to a new report by STATEC, Luxembourg's national statistical office, construction prices ross less rapidly between October 2022 and April 2023 than in the previous six months.

The construction price index rose by 5.2% between October 2022 and April 2023, marking a further slowdown compared with the previous six months (+6.8% between April and October 2022). Over one year, residential construction prices increased by 12.3%. The annual rate of change thus fell for the first time since April 2021, but remained at a very high level, noted STATEC. This result was found to be in line with the general inflationary context, with the prices of certain materials and the cost of labour continuing to rise at the start of 2023.

Structural work, the trade with the highest weighting in the index, showed a half-year increase of 4.8%. The substantial increase in the price of cement and its derivatives over the last half-year weighed on the prices of masonry work (+5.0%), which was also affected by the increase in the cost of labour. The more contrasting evolution of other construction materials, particularly the decline in iron reinforcements, slightly slowed down this increase. Following the drop in diesel prices, earthworks (+3.7%) were the services whose prices have changed the least over a six-month period.

The prices of roofing work (+4.6%) again progressed more slowly than the general index (+5.2%). STATEC noted that roofing was the only trade whose prices change by less than 10% over one year, but this area was strongly impacted in 2020 and 2021 (+29.8% between 2020 and 2021) by the soaring price of wood, which stabilised or even fell over the last half-year. However, roofing prices were boosted by roofing work (+5.5%) and in particular windows and domes on the roof (+8.3%).

As for the closing of the building, which includes windows with solar protection devices, garage doors and facades, there was a price increase of 6.1% between October 2022 and April 2023. The increase in the price of insulating materials and labour caused facade work prices to rise by 5.4% in six months.

Although the prices of certain supplies began to stabilise, STATEC noted continuous and sustained increases for technical installations (+4.2%). The rise in the cost of labour, however, impacted all trades, from sanitary installations (+5.0%) and heating/ventilation (+3.6%) to electrical installations (+4.8%).

The increase in the cost of labour and certain supplies (tiles, interior doors, etc.) was also felt at the finishing level (+6.1%). The prices of services related to tiling (+6.9%), marble (+8.3%) and interior joinery (+6.7%), but also painting (+6.5%) and flooring (+6.2%) experienced some of the biggest changes over the last half-year.