New home construction costs slow to 3.2% in April

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In April, it cost 3.2% more to build a home than in the same month last year, but costs slowed by three percentage points compared with March. Construction output slowed to 2.8%.

New housing construction costs will have risen by 3.2% in April compared with the same month in 2022, representing a slowdown of three percentage points on the growth recorded in March (6.2%), according to data released on Wednesday by the National Statistics Institute (INE). This is the smallest increase since February 2021.

Both components of the New Housing Construction Cost Index (ICCN) showed a deceleration compared with the previous month, particularly materials prices, which showed zero variation in like-for-like terms, whereas in March they had risen by 4.6%.

Labor costs rose by 7.8% year-on-year in April, down 0.7 percentage points on the previous month.

Year-on-year evolution of the HICP

New home construction costs slow to 3.2% in April

Among the materials that most influenced this variation were cement, with prices up by over 20% year-on-year, ready-mix concrete, with growth of over 15%, and wood and wood products, with variations of over 15%.

In the case of steel for concrete, heavy and light sections, and mild and galvanized sheet steel, decreases of around 30% were observed compared with the same month in 2022.

In a chain-linked comparison, the change in construction costs was -0.2%, with material costs down 0.3% on March and labor costs down slightly by 0.1%.

Construction output slows to 2.8% in April

The construction production index posted year-on-year growth of 2.8% in April, down 1.2 percentage points on the rate recorded in March, according to INE (Statistics Portugal) data released on Wednesday.

This indicator reflects slowdowns in both segments: civil engineering decelerated by 0.8 percentage points in April, achieving growth of 3.8%, while building construction posted an increase of 2.2%, compared with a rise of 3.5% the previous month.

Development of the construction output index

New home construction costs slow to 3.2% in April

As for the employment index, year-on-year growth slowed to 2.8% in April this year, compared with 2.9% in March.

The wages index, meanwhile, recorded a 7.8% year-on-year rise in April, compared with 8.6% growth the previous month.

In monthly terms, the rates of change in employment and wages stood at 0.2% and -2.9% respectively, compared with increases of 0.3% and -2.2% in April 2022, in the same order.

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