Overall construction costs remained broadly stable in July, although significant price movements in individual materials and trades show conditions are changing beneath the headline figures.
QV CostBuilder reported that construction costs were basically flat for the month, marking the second consecutive month of relative stability.
One factor helping to contain costs was diesel, which fell 20.7% month-on-month. The decline reduced costs in fuel-intensive parts of the construction industry, particularly excavation, where prices dropped 4.5%.
Excavation relies heavily on machinery and transport, which means changes in diesel prices can flow through relatively quickly.
However, not everything became cheaper. Concrete blockwork rose 0.8%, concrete increased 0.9% and ready mixed concrete climbed 3.7%. Larger increases were recorded for polystyrene sheet, up 9.3%, Aquatherm pipework, up 7.5%, copper pipework, up 4.0% and wool insulation, up 3.0%.
QV CostBuilder Spokesperson Martin Bisset said the stable headline result was only part of the story.
“The headline result is very stable, but that doesn’t mean nothing is moving. We’re still seeing movement below the surface,” he said.
Mr Bisset said the recent decline in diesel had helped keep construction cost growth in check, although fuel prices remained highly volatile amid the fluid situation in the Middle East.
Why changing costs matter for homeowners
For anyone planning to build or renovate, stable overall construction costs can be encouraging. However, the movements within individual categories demonstrate why a project’s final cost can still change even when headline inflation is subdued.
Different projects use different combinations of materials, trades, machinery and transport, so changes in specific inputs may have a much greater effect on one build than another.
That makes budgeting important, particularly when finance is involved. Borrowers considering a construction loan or using their mortgage to fund renovations should understand how much they can borrow and consider how unexpected cost increases could affect their plans.
Anyone preparing to build or renovate is welcome to get in touch to discuss their finance options. If you have clients who could benefit from understanding how their project might be funded, we’d appreciate you putting us in touch.
