In Q1 2017, producer costs for construction increased again (+1.1%)Costs of production indices in construction - first quarter 2017

In Q1 2017, producer costs for construction increased by 1.1% after +0.3% in Q4 2016. They considerably accelerated in civil engineering (+2.1 % after +0.9%) and to a lesser extent in building construction (+0.8% after +0.3%) and in specialised construction works (+0.8% after +0.3%). Over a year, these costs accelerated too (+2.8% after +1.5% in Q4 2016). They were very dynamic in civil engineering (+5.7% after +1.9% in Q4 2016) and slightly less dynamic in building construction (+2.1% after +1.3%) and in specialised construction works (+2.2% after +1.5%).

Informations rapides
No 157
Paru le : 16/06/2017

Warning : Monthly production cost indices in construction are now released on a quarterly basis. The comments provided below concern the first quarter of 2017.

In Q1 2017, producer costs for construction increased by 1.1% after +0.3% in Q4 2016. They considerably accelerated in civil engineering (+2.1 % after +0.9%) and to a lesser extent in building construction (+0.8% after +0.3%) and in specialised construction works (+0.8% after +0.3%). Over a year, these costs accelerated too (+2.8% after +1.5% in Q4 2016). They were very dynamic in civil engineering (+5.7% after +1.9% in Q4 2016) and slightly less dynamic in building construction (+2.1% after +1.3%) and in specialised construction works (+2.2% after +1.5%).

Materials cost rose

In Q1 2017, materials cost rose by 1.4% in building construction and in renovation of existing buildings. It sharply increased in civil engineering (+4.1%) due to soaring bitumen prices (needed in road development works and in making of mixes). It recovered in specialised works for civil engineering (+0.7% after −0.4% in Q4 2016).

Over a year, materials cost strongly accelerated in civil engineering (+11.2% after +1.6%) due bitumen prices. Materials cost recovered significantly in building construction (+2.8% after −0.4%) as well as in renovation of existing buildings (+1.8% after −0.4%) and more moderately in specialised works for civil engineering (+0.4% after −0.8%).

Graph2 – Materials cost

  • Source: INSEE

Energy cost dramatically accelerated

In Q1 2017, the cost of energy accelerated in building construction (+9.1% after +3.5%) and in public works (+8.0% after +6.3%) due to a rise in fuel products at the end of 2016 and at the beginning of 2017.

Over a year, the acceleration is even more vigorous (+22.9% after +8.3% in public works and +22.0% after +5.8% in building construction) due to an improvement in diesel and fuel oil prices.

Graph5 – Energy cost

  • Source: INSEE

Graph1 – Production costs in construction

  • Source: INSEE

Table1 – Variations in producer cost indices for construction

In %
Variations in producer cost indices for construction
Heading Weights (in %) Q1 2017/ Q4 2016 Q1 2017/ Q1 2016
F Construction 100.0 +1.1 +2.8
41.2 Construction of buildings 10.1 +0.8 +2.1
42 Civil engineering 16.2 +2.1 +5.7
43 Specialised construction works 73.7 +0.8 +2.2
43BT Buildings 64.2 +0.7 +1.8
43BTC New buildings 24.6 +0.8 +2.1
43BTR Existing buildings 39.6 +0.7 +1.7
43TP Specialised works for civil engineering 9.5 +1.8 +4.7
Buildings (41.2 + 43BT) 74.3 +0.8 +1.9
Public works (42 + 43TP) 25.7 +1.9 +5.3
  • Source: INSEE

Table2 – Items of producer cost indices for construction

In %
Items of producer cost indices for construction
Costs items Q1 2017/ Q4 2016 Q1 2017/ Q1 2016
Equipment Buildings -0.7 -0.7
Public works +0.7 +0.4
Labour Labour costs in construction +0.7 +1.8
Energy Buildings +9.1 +22.0
Public works +8.0 +22.9
Materials Construction of buildings +1.4 +2.8
Existing buildings +1.4 +1.8
Civil engineering +4.1 +11.2
Specialised works for civil engineering +0.7 +0.4
  • Source: INSEE

Equipment cost decreased in building construction and increased in public works

In Q1 2017, equipment cost decreased in building construction (−0.7% after +0.5%); it declined by 0.7% yoy (after −1.5%). In public works, it rose over the quarter (+0.7% after −0.1% in Q4 2016) and it increased slightly over a year (+0.4% after −0.2%).

Graph3 – Equipment cost

  • Source: INSEE

The variation in production costs in construction is slightly revised downward

The variation in producer costs in construction between the third quarter of 2016 and the fourth quarter of 2016 is revised downward by 0.1 points.

Documentation

Methodology (pdf, 149 Ko)