Project Construction Costs Rise 5-7% YoY In Sept quarter : Report
Project Construction Costs Rise: Labor costs increased by 8-10% during the three-month period ending September 30, 2022, when compared to the same period last year.
According to the latest report by property brokerage firm CBRE South Asia, the cost of constructing new projects in India increased by 5-7% between July and September 2022 (Q3CY2022) when compared to the same period last year (Q3CY2022).
According to the report Project Management 2.0 – Driving Value in the ‘New Normal’ Era. Price increases in construction materials are being fueled by reduce production due to the pandemic. As well as increased global shipping costs caused by supply chain bottlenecks.
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Project Construction Costs Rise
Meanwhile, labour costs increased by 8-10% during the three-month period ending September 30, 2022. When compared to the same period last year, putting additional pressure on project construction costs. Steel price increases of 20% per year have only exacerbated the situation.
“It is widely expected that inflationary pressures will ease in 2023.” This, along with the resolution of supply chain disruptions and more active government policy intervention. May limit material price increases.” The report said, adding that cost pressures are likely to persist in the short term even as overall cost increases are expected to decline in the coming quarters.
“Amid ongoing geopolitical complexities. The outlook for construction costs remains stable but cautious. As market volatility, monetary tightening, continued high inflation, the possibility of a recession in developed economies. And geopolitical turmoil-related challenges will likely persist in 2023.” “We forecast a marginal increase in overall construction costs across cities during 2023. With Mumbai likely to see a sharper increase,” it said.
Project Construction Costs Rise
However, strong demand for construction is expected to continue to drive up employment in the sector. Currently, despite increased wages, benefits, and incentives offered by employers, the availability of skilled construction workers remains a challenge.
“Despite supply constraints. The demand side of the equation is being bolstered this year by rental increases and market demand.” Construction demand is expected to remain strong in the near term. We anticipate a comparatively stable outlook for the Indian economy, with the possibility of an economic slowdown; however, significant pent-up demand for new construction—including government infrastructure projects—should largely sustain construction activity in India.”
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