Building costs up 20 p.c., and rise to continue

Press, 16 November 1981, Page 29

Building costs up 20 p.c., and rise to continue

Building costs rose 20 per cent last year, and are likely to rise by a similar amount in the next 12 months, according to the latest Building Industry Advisory Council newsletter.

“The consumers price index has temporarily slowed and stabilised about 15 per cent, but with building costs continuing to rise and building being a part of the consumers price index, it appears likely that this index will again increase later in the year,” the newsletter said.

The price index for building materials slowed to 18.8 per cent, but the composite cost indices for the building and the construction industries rose to 20.1 per cent and 21.9 per cent respectively in the year ended June, 1981. “This was a result of a marked increase in plant and transport costs, and a small increase in labour costs. These indices are not expected to slow this year, particularly if the wage

round is not contained,” it said.

The Valuations Department’s index for house prices rose 18.4 per cent in the year, reflecting rising prices in the existing property market. “This market has been buoyant in the last six months and is likely to remain so for the rest of the year,” the newsletter said. By comparison, section prices had risen only 8.1 per cent over the same period. The slowing in the building price indices for the year was more shortlived than expected. Since then the July Budget had indicated that inflationary pressure would persist on the already high rates of inflation, the newsletter said. “It is estimated that building costs are likely to rise by an average of 20 per cent in the year ending June, 1982, and that civil construction costs are likely to rise by an average of 22 per cent, because of a higher plant content."