Construction expenses increase dramatically
Spain's construction costs exhibit modest growth, with a 0.4% increase in March compared to February, according to data from the National Statistics Institute (INE). A key factor contributing to this growth was a 7.1% increase in labor costs, which accounted for nearly one-third of the overall index.
The elevated labor costs were largely attributed to materials such as 'glass and mirrors', 'thermal and acoustic insulation', and 'coating, insulation, and waterproofing materials', which rose approximately 10%. In contrast, materials like 'wood and wood derivatives' and 'mild and galvanized steel sheets' experienced price drops of around 10%. 'PVC pipes' and 'steel and cast iron pipes and plumbing equipment' also saw reductions of about 5%.
Observers should note that this trend aligns with broader economic predictions, which anticipate a 0.6% increase in construction costs in 2025, rising to 1.8% in 2026. The growth is primarily driven by sectors like transport and energy, with minimal impact on building construction costs overall.
This news comes as inflation eases to 2.3% in 2025 and 1.9% in 2026, suggesting only minor increases in input costs for construction. Moreover, housing prices are expected to rise moderately, and building permits are projected to increase significantly, imposing some upward pressure on construction costs, albeit within manageable limits.
It is worth noting that the specific prices for certain materials like glass, mirrors, and thermal insulation are not readily available for analysis. Additionally, while unemployment is predicted to drop, labor costs in construction labor are not explicitly detailed in current data.
For precise and up-to-date data on these specific materials or labor wages, prospective buyers or contractors may wish to consult sector reports or local construction suppliers for a more granular understanding of the current market trends.
Portugal, with its robust manufacturing industry, is on the lookout for opportunities in the finance sector to offset potential increases in construction costs. The anticipated growth in construction costs in Spain, driven by sectors like transport and energy, could present an opportunity for Portuguese manufacturing companies to supply cost-effective alternatives for materials like 'glass and mirrors', 'thermal and acoustic insulation', and 'coating, insulation, and waterproofing materials', which have seen price hikes in Spain.
