Construction costs in January 2013 decreased by 0.5%
Compared to December, construction costs in Latvia in January 2013 decreased on average by 0.5%, according to the data of Central Statistical Bureau. Labour remuneration of workers declined by 3.0%, which can be explained with the drop in the work volume during the winter season. Maintenance and operational costs of machinery and equipment increased by 0.3%, and the prices of building materials rose by 0.1%.
Decrease in construction costs of non-residential buildings had the most significant lowering impact on the overall level of construction costs.
As compared to January of the previous year construction costs increased by 5.0%. The most rapid rise - of 12.1% - was recorded in the labour remuneration of workers. Maintenance and operational costs of machinery and equipment grew by 4.4% and prices of building materials rose by 2.0%.
Growth in the construction costs of transport facilities, which takes the largest share in the total volume of construction work, had the most significant increasing impact on the overall level of construction costs.
Changes in construction costs by main resource group
compared to the corresponding month of the previous year, %
As each year, also in January 2013 the weight structure used for the index calculation was revised. In order to ensure compliance of the construction cost index with the current economic situation in Latvia and users’ demands, this year unified construction models used in the index calculations were updated. For executing the task, the CSB involved experienced construction experts, who evaluated the current system of weights and developed new construction models, which characterise the lately used construction technologies and building materials more precisely.
This year for the calculation of the CCI, 11 unified construction models are used. These models are combined in groups of related construction objects and the calculated construction cost indices are available in the database:
- Residential buildings;
- Non - residential buildings;
- Civil engineering structures (incl. transport facilities and underground main pipelines).
Prices of December 2012 serve as the base prices. From January 2013 the base or comparison period for indices is 2010 (2010=100). To ensure continuity of time series over a longer time period the price indices in the Internet database are published also with the base 2005=100.
In 2013 the price data on construction resources are obtained from about 180 construction enterprises and 30 trade enterprises. Moreover, construction cost calculations are based on the prices of building materials submitted by the enterprises for the calculation of producer price indices in industry and import price indices.
The sample includes construction enterprises with the highest value of own account construction works in 2012.The share of enterprises with the work volume exceeding LVL 1 million comprised 79%, in 20% of which the volume of own account construction works exceeded LVL 5 million per year. The criterion for the sample of trade enterprises is their turnover and specialization.
More detailed information is available in the CSB Database.Press release on changes of construction costs in February 2013 will be published on 27 March 2013.
Prepared by Producer Price Indices Section
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