In Q2 2017, producer costs for construction slowed down (+0.3%)Costs of production indices in construction - second quarter 2017

In Q2 2017, producer costs for construction increased slightly, not as much as in Q4 2016 (+0.3% after +1.0%). They slowed down in building construction (+0.4% after +0.8%) and in specialised construction works (+0.3% after +0.8%) while they decreased in civil engineering (−0.3%) after four quarters of growth. Over a year, though, these costs remained dynamic (+2.6% after +2.8% in Q1 2017). Again, they rose sharply in civil engineering (+4.1% after +5.7%) and to a lesser extent in building construction and in specialised construction works (+2.3% in both sectors as in the previous quarter).

Warning : Monthly production cost indices in construction have been released on a quarterly basis since June 2017. The comments provided below concern the second quarter of 2017.

In Q2 2017, producer costs for construction increased slightly, not as much as in Q4 2016 (+0.3% after +1.0%). They slowed down in building construction (+0.4% after +0.8%) and in specialised construction works (+0.3% after +0.8%) while they decreased in civil engineering (−0.3%) after four quarters of growth. Over a year, though, these costs remained dynamic (+2.6% after +2.8% in Q1 2017). Again, they rose sharply in civil engineering (+4.1% after +5.7%) and to a lesser extent in building construction and in specialised construction works (+2.3% in both sectors as in the previous quarter).

Materials cost increased in buildings, it decreased in civil engineering

In Q2 2017, the cost of materials rose again, albeit to a lesser extent than in Q1 2017, in building construction (+0.8% after +1.4%) and in renovation of existing buildings (+0.7% after 1.4%). However, it fell back in civil engineering (−0.5% after +4.0%) due to a downturn in bitumen prices. It was stable in specialised works for civil engineering (after +0.7% in Q1 2017).

Over a year, materials cost was still dynamic in civil engineering (+8.4% after +11.2%). It accelerated in building construction (+3.2% after +2.8%) and in renovation of existing buildings (+2.5% after +1.8%).

Graph2 – Materials cost

  • Source: INSEE

Energy cost feel back sharply

In Q2 2017, the cost of energy declined in building construction (−3.7%) and in public works (−5.2%) due to a decrease in fuel oil and gas oil.

Over a year, the increase in the cost of energy was less marked than at the beginning of the year but it remained significant (+9.9% after +23.0% in public works and +9.3% after +22.0% in building construction).

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 %) Q2 2017/ Q1 2017 Q2 2017/ Q2 2016
F Construction 100.0 +0.3 +2.6
41.2 Construction of buildings 10.1 +0.4 +2.3
42 Civil engineering 16.2 -0.3 +4.1
43 Specialised construction works 73.7 +0.3 +2.3
43BT Buildings 64.2 +0.4 +2.1
43BTC New buildings 24.6 +0.4 +2.3
43BTR Existing buildings 39.6 +0.4 +2.0
43TP Specialised works for civil engineering 9.5 -0.3 +3.5
Buildings (41.2 + 43BT) 74.3 +0.4 +2.2
Public works (42 + 43TP) 25.7 -0.3 +3.9
  • Source: INSEE

Table2 – Items of producer cost indices for construction

In %
Items of producer cost indices for construction
Costs items Q2 2017/ Q1 2017 Q2 2017/ Q2 2016
Equipment Buildings -0.5 -0.8
Public works -0.1 +0.4
Labour Labour costs in construction +0.4 +2.7
Energy Buildings -3.7 +9.3
Public works -5.2 +9.9
Materials Construction of buildings +0.8 +3.2
Existing buildings +0.7 +2.5
Civil engineering -0.5 +8.4
Specialised works for civil engineering 0.0 +0.6
  • Source: INSEE

Equipment cost slightly decreased in building construction and was practically stable in public works

In Q2 2017, equipment cost decreased again in building construction (−0.5% after −0.4%); it declined by 0.8% yoy (after −0.5%). In public works, it was practically stable over the quarter (−0.1% after +0.8% in Q1 2017) and it increased slightly over a year (+0.4% after +0.5%).

Graph3 – Equipment cost

  • Source: INSEE

The variation in production costs in construction has been slightly revised downward for Q1 2017

The variation in producer costs in construction between the fourth quarter of 2016 and the first quarter of 2017 has been revised downward by 0.1 points, to1.0%.