Construction costs continue to rise but at slower pace

ISTANBUL

The annual increase in the headline construction cost index eased from 66.1 percent in June to 46.4 percent in July, data from the Turkish Statistical Institute (TÜİK) have shown.

On an annual basis, the index fell for a second month in a row in July.

The month-on-month increase in the cost index, however, accelerated from 0.4 percent to 1.9 percent.

The headline cost index recorded a 29.1 percent increase since the end of 2023. The annual increase in construction costs hit as high as 120 percent in September 2022 but the pace of the rise started to moderate in the following months.

Labor costs in the construction sector advanced 1.5 percent monthly for an annualized increase of 58.4 percent.

The index of materials cost rose by 2.1 percent month-on-month, and 41 percent year-on-year.

Meanwhile, Türkiye’s construction materials exports increased by 6.9 percent in July compared with the same month of last year to reach $2.49 billion.

In terms of volume, exports amounted to 3.82 million tons, according to the Association of Turkish Construction Material Producers (İMSAD).

Construction materials imports were around $1.1 billion in July, almost unchanged from a year ago, said the association. Türkiye imported 342,100 tons of construction materials in the month.

The 12-month rolling construction materials exports amounted to $28.89 billion as of July, the association said.