Flattening of construction price inflation continues

Price increases in building construction continued to slow down last year and most recently only amounted to 0.8 per cent. The current construction price index from the Federal Statistical Office shows a stabilisation of construction prices at a high level. The background and future developments are explained below.

In 2022, construction prices in building construction experienced a sharp increase of over 8 per cent. In contrast, the construction price index for April 2024 shows a moderate increase of 0.8 per cent compared to the previous year. Since the last publication in December 2023, prices in building construction have risen by 0.4 per cent. Despite this slowdown, construction prices remain stable at a high level. Compared to three years ago, building construction prices increased by 13 per cent in April 2024.

Material prices as the driving force
A key factor in the levelling off of construction prices is the development of material costs. The KBOB material price index for building construction shows that material prices fell by 2.2 per cent between May 2023 and May 2024. Most of this decline took place between May and October 2023. Since November 2023, the material price index has stabilised and fell only slightly by 0.4 percent. Prices fell particularly sharply for reinforcing steel, which was over 10 per cent cheaper in May 2024 than in the previous year.

Energy and fuel prices as a counterbalance
While falling material prices are contributing to a slowdown in the development of construction prices, rising energy and fuel prices are counteracting this trend. According to the national consumer price index, energy and fuel prices in May 2024 were 6.6 per cent higher than in the previous year, which is putting upward pressure on construction prices.

Outlook for future developments
Despite the current stabilisation, there are factors that point to a possible renewed increase in construction prices. Wage trends and the continued rise in energy costs could lead to an increase in construction prices of around 1 per cent in 2024. It remains to be seen how these factors will affect the construction price index in the long term.

Conclusion: diverse influences on construction prices
The current development of construction prices is influenced by various factors. While falling material prices suggest a stagnating or declining trend, higher energy and fuel prices as well as wage trends are putting upward pressure. Construction prices are currently stabilising at a high level and a moderate increase is expected for 2024.

Quelle: wüestpartner