construction costs After the inflation crisis broke out in the western economy, companies do not take a break for more than a year. Labor and material consumption according to the Ministry of Transport, Mobility and Urban Agenda (Mitma) until May increased 2.4%compared to the end of last year. Cost of work they are just 1.4% below the all-time highs reached exactly one year ago in May 2022.
This stabilization takes place at all-time highs: In the bulletin sent by the Real Estate Developers Association of Madrid (Asprima) to its partners throughout July, it is stated that “the cumulative increase since May 2020 is 26.82% in non-residential buildings and 1.77% in residential construction”. On the average of all buildings, the increase in the Mitma index exceeds 28% compared to the fifth month of 2020. Sources from the developer sector confirm that although they wait for the new academic year to begin, costs have indeed stabilized. September to see “where they thrive”.
Why did they stabilize? In the first months of 2022, there has been a decrease in some raw materials, whose prices have increased rapidly in recent months. This situation aluminumFutures on the British market in March last year are trading at 3,500, currently hovering just above 2,150, which is down more than 30%. Moreover steel or copper prices felldecreased by 22.5% and 13.6%, respectively. But the price of all materials did not stay the same or fall: glass and cement are 32% and 21.5% more expensiveCompared to one year ago, respectively, according to Asprima.
What will happen in the coming months?
CaixaBank ResearchIn its latest article on the subject, the financial institution’s study center for economic analysis draws attention to the statement that “industrial metal prices in international markets have dropped significantly (the LME reference index has fallen 30% since its peak in April)”. 2022) and a fall in energy prices (many construction materials are highly energy-intensive to manufacture) The downward trend in costs will consolidate in the coming months“.
This institution predicts that the cost of housing construction will change negatively on an annual basis in the coming months. “Housing construction costs in Spain could start falling in August In 2024, there will be an average decrease of around 5%. Despite this decline, costs will consolidate at pre-2024 levels. shockAbout 16% above the January 2021 level,” points out the economic analysis center’s real estate department.