Construction costs continue to rise

The overall construction cost index for apartment buildings rose by 14.6 percent in July this year compared to July 2021. For June, the corresponding increase rate was 14.1 percent, Statistics Sweden announced on Monday. This is the largest change in annual rate since 1980.

This was followed by several comments in the press and media from housing and real estate companies indicating that in the current situation, with sharply increased material prices, increased energy prices and increases in interest costs, many construction projects for rental and condominiums will likely be put on hold.

Largest annual cost increase for reinforcing steel

Among the different categories of construction materials for the production of multi-family buildings, the annual changes for steel and iron including reinforcing steel continued to be extremely high, despite having decreased slightly after April 2022. The costs of reinforcing steel and iron and other steel rose by 50.7 and 35.6 percent, respectively, between July 2021 and July 2022.

Development for various building materials July 2021–July 2022
Construction cost index for apartment buildings excluding VAT

Source: Statistics Sweden

The width of the bars corresponds to the weight share of the building material group as a percentage of all building materials when calculating the Construction Cost Index for apartment buildings. The height of the bars corresponds to the average price trend for each product group.

White goods increased the most in July

Among contractors, building material costs have risen by 20.7 percent in total between July 2021 and July 2022. The category that had the largest monthly increase between June 2022 and July was white goods, which got a solid boost of plus 4.5 percent in one month and now stands at a whopping 12.7 percent compared to July 2021. Other categories have also increased during the time period.

Compiled by Kent Oderud, chairman of APPLiA

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